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Budget to dig deep in the common man's pocket

The devastating Gujarat earthquake, which provided the finance minister 'a long handle to generate additional revenues through a heavy dose of taxation,' has robbed the budget of its surprise element. The general public does not expect any sops in the coming budget.

But the common refrain of the salaried tax payers, who are greatly exercised over the government's decision to impose a two per cent surcharge on the income tax for the Gujarat quake, is that the government must not ''squeeze'' them further by imposing new taxes.

The government hopes to generate Rs 13 billion through the two per cent surcharge on direct taxes for dealing with the aftermath of the devastating quake. But the Gujarat tragedy has belied the hopes of hiking the income level of Rs 150,000 to higher slabs for application of the highest tax rate of 35 per cent including surcharge.

''I don't expect any relief in the income tax or a lowering of prices of essential articles. In fact, there has been no budget in recent times where prices of essential goods were brought down,'' says a senior railway official, who did not wish to be identified.

''But the government should try to generate revenues through an efficient management of the economy and not by hiking taxes. I am anyway bracing myself for a punishing budget.''

She said the focus of the budget would be on the nascent Information Technology sector.

''For the next decade or so, IT, which has been earmarked Rs 3.65 billion during the current fiscal, would be the cynosure of any finance minister, and this sector could expect substantial budgetary allocation.''

There would also be no justification for a hike in railway fares in the larger public interest unless basic amenities, including faster speed, cleanliness and better catering, were ensured to rail passengers, she said.

However, fares for certain suburban trains, which are highly subsidised, should go up, she held.

Daya Singha, wife of a retired IAS officer, said that budgets in recent times have been extremely punishing for the salaried class. Businessmen can always find some avenue for hiding their income but the salaried class people are always at the receiving end who have to pay taxes at the source.''

For the harried housewives and pensioners, the budget does not generate much hope.

''We have been lowering our standard to meet our requirements. Inflation is nibbling at the real value of the rupee. Besides, pensioners are aghast at the prospect of the government slashing interest on small savings and deposit rates,'' she said and strongly suggested differential rates of interest for senior citizens.''

''My heart reaches out for the Gujarat quake victims and it is the duty of all Indians to share their agony. But the hike in I-T surcharge should be a one-time affair and not a permanent fixture in future budgets.''

It is painful that the government's annual expenses on international travel of the employees grosses Rs 7.50 billion. The government also spends a whopping Rs 320 billion on the wage bill of its bloated bureaucracy. But there is little for people in terms of services - poor infrastructure, shabby roads, power tripping, inadequate water supply.

D S Mehta, industry consultant and freelance writer, however, argues that the government may not raise prices of essential commodities because of the election to five state assemblies.

''The government can't afford to do away with the populist sops altogether because of the compulsions of electoral politics. In fact, one can easily expect a hike in the allocation on basic education and health.''

Rohit Kumar and Subhashish Sarkar, who are doing G-NIIT course at NIIT, expressed satisfaction over the government's policy on the IT sector.

''The much-touted 'Information Technology for All' project of the prime minister is a step in the right direction, and the finance minister may earmark substantial budgetary allocation for the proposed Community Information Centres (CICs).''

The NIIT students said the government would strive for a networking of the CIC sand Internet-enabled places spread across the country's rural hinterland. However, efforts should be made to give a fillip to Software Technology Parks in the country.

They felt that increased access to Internet and high telephone tariff were incompatible.

''Telephone tariffs should be reduced further to make it affordable for people to go online. Further, it would be implausible if the government effects a hike in university fee. Instead, it should make efforts for making education job-oriented.''

They also hoped that, in view of the increased seismic activities in the country, the government must strengthen those institutions, which are working for disaster management.

Concerned about cheap Chinese products being dumped in Indian markets, small producers and traders also expect the government to come out with some strong measures like anti-dumping duties to save the domestic industry.

Ramesh Dujari, a trader of electrical goods in Chandni Chowk market in the walled city, said: ''We are in no situation to compete with the Chinese. The government must put some deterrent taxes on such foreign goods.''

Dujari suggested hiking import duty on agricultural commodities and strengthening of anti-dumping mechanism to check the onslaught of Chinese goods on Indian market.

''Prospects of a hike in excise duty on white goods and luxury items is also a matter of concern for both consumers and producers.''

For Dulal, a rickshaw-puller from Bihar, the budget is an exercise in abstraction. ''I am in the capital because pulling a rickshaw here gives me better income as compared to Samastipur back home. My only concern is that the price of kerosene should not go up. Besides, I would also expect that there is no hike in postal services like postcards and moneyorders. Otherwise, all my savings will go up in smoke.''

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