ENCOUNTERS - 202

A weekly Column by Rajan Khanna

The Union Finance Minister Mr. Pranab Mukherji has been successful in keeping two sections in good humour; the first one is of the industry captains and the second one is of the media barons. For the remaining majority of people comprising the middle class and the poorer sections of the society, the Union budget for the year 2010-2011, portends more miseries.

The hike in excise duty on petrol and diesel, understandably, is going to have a cascading effect and the prices of the essential commodities- especially food items- are going to surge, further. Already, people are suffering from the effects of high rate of inflation in the food commodities, the hike in duty, is further going to escalate the same.

It is ridiculous that the maximum amount of taxes are heaped on petrol and diesel- no other country in the world charges as much taxes on the said items, as India does. Customs duty is levied when crude oil is imported; on the refinery level, excise duty is imposed; states levy sales tax and the local bodies add their bit by charging octroi duty on the fuels on which the economy runs. In a country like India- which is diversified in geographical terms also- the transportation costs play a big role in determining the retail prices of all the commodities. For example, wheat has to be transported from the northern planes to the rest of the country; sugar is produced in Uttar Pradesh and Maharashtra and is sent out from the said states- the escalation in the fuel prices, obviously, will add to the already inflated prices of the said food items.

The opposition parties- in and outside parliament- have joined hands to vehemently oppose the hike in the excise duty on petrol and diesel; even the U.P.A. partners like T.M.C. and D.M.K. have been insisting to the finance minister to roll back the hike but as the reports have been suggesting, he is unrelenting. Ideally, the media should also support the agitation started by the opposition parties- incidentally they have unanimously come together for the first time on the issue of dearness since the year 1992- but unfortunately it has decided to gloss over the issue which has been and will continue to torment the middle class and the poor of the country. Again a superb example of the media management skills of the Congress party!

As far as budgetary concessions are concerned, whatever is offered in the form of exemptions in the income tax is, just an eyewash. Particularly, for the middle class, as if the existing rate of inflation was not enough, buying a new home has been made costlier by imposition of service tax on the housing industry.

Budgetary spending also needs to be closely looked at. For example there are serious doubts that Rs. 33,000 crores earmarked for N.R.E.G.A, will not reach to sections, the amount is meant for. Many states have been complaining that the amount previously sanctioned for the National rural employment schemes are not disbursed appropriately.

It has been a stated fact that the benefit of the escalated prices of the food items, does not reach to the farmers; the cream of the profits are usurped of the middlemen. Finance Minister was expected to create a mechanism- through budgetary provisions- to cut down the gap between the farmer and the consumer; the measure would have immensely benefited both the sections. Regrettably, Mr. Pranab Mukherji has failed to address the issue. In social terms, it has become a ritual- to increase duties on cigarettes and tobacco products- in all the successive budgets. The pertinent question is: instead of increasing the duties on them why gutkhas- which are proving to be highly carcinogenic- cannot be banned?

(The author is a social activist. He can be contacted on rajan_c3@hotmail.com )