Spiritual Quotient in resurgent India

Spiritual Quotient in resurgent India  

By Gopal K Agarwal,

Three great social movements are simultaneously taking place presently in India and will have long-lasting effect on India's future. There is a sort of revolution that is taking place.

The mass movement by Swami Ramdev is transforming ordinary person's way of living on a daily basis, making him aware of healthy benefits of Yoga Pranayam and Ayurveda. He has created a revolution among people where persons from all walks of life are getting aware of big benefits from daily practices of yoga and Pranayam. The mass appeal of his movement is so effective that from a rickshaw-puller to a housewife and to a professional or a businessman, all are being benefited from his teachings and have started practising it in their daily routine and adopting it in their lifestyle.

The yoga programmes are being held across the length and breadth of the country. Even in Europe and other foreign his sessions are attended by large gathering. It is a seven-day urse in the morning from 0500 AM to 0730 AM with attendance in thousands Millions of people watch these sessions live on television channels, adopt these techniques and are being benefited.

The second important mass movement, which is transforming Indian life, is the Sudershan Kriya by Art of Living Foundation of His Holiness Sri Sri Ravi Shankar. The Kriya is being taught in a seven-day basic and advance courses and involves a breathing technique. Along with this technique his message of love, peace and positive thinking is appeal to the intellectual mind and influence effluent middle-class to a great extent. It is transforming their life, creating a bonding among his followers.

He travels and teaches internationally, reminding us that great spiritual traditions have common goals and values. His talks programmes and Sudershan Kriya have helped people in reducing stress, experiencing physical and emotional healing, and developing a sense of belonging. His work is getting recognition in all parts of the world. Art of Living Foundation has its offices in 157 countries around the world, and the teachings are being adopted by all without any distinction of caste, creed or religion. He is a strong contender for Nobel Peace Prize

The third slow and steady movement having potential of a spiritual revolution is Vipasana. The observation technique, which is a Pali word meaning insight, i.e. seeing things as they are, encourages people not to react to external stimulus. The reaction to external stimulus by an individual takes away his calmness, peace of mind, thereby causing exhaustion. By observing these external and internal stimulus and its effect on human body and analysing their nature of impermanence, a person acquires a balance whereby slowly his reactions subside. He stops reacting to external stimulus, and slowly this process helps him overcome internal disturbances caused by past actions and situations Vipasana is one of India's most ancient techniques of meditation Some 2500 years ago. It was rediscovered by Gautam Buddha and taught by him as a universal remedy for universal ills. It is now being propagated by Shri S.N. Goenka through a ten-day course. During the ten days, participants remain within the area of the course site, having no contact with the outside world. They refrain from reading. writing and all forms of communication and get into deep meditation and contemplation. The process of Vipasana has worked profound changes within oneself, which persist even after the end of the course. The mediator finds that whatever mental strength was gained during the course can be applied in daily life for the good of others and for one's own benefit. Life becomes more harmonious, fruitful, and happy.

Shri S.N. Goenka says "I do not wish to convert people from one organised religion to another. But conversion is involved: from misery to happiness, from defilement to purity, from bondage to liberation, from ignorance to enlightenment." He has never sought publicity, preferring to rely on word of mouth to spread interest in Vipasana For these reasons he is less widely known than he deserves to be.

I think the three main move ments along with the economi cally resurgent India are creating a mindset that is preparing India for the role it well deserves in the future.

The second important movement that is tansforming Indian life is the Sudershan by Art of Living Foundation of Holiness of his Sri Sri Shankar.

In search of lost pride

 In search of lost pride

By Gopal K Agarwal,

Why the politician feels free to disregard Hindu sentiment

Years of subjugation and Hindu philosophy have created a mindset which does not react to aggression or exploitation. There are circumstances that call for collective wisdom to dictate action-when castes, creeds or religious communities must revolt against any act on the part of an individual or institution causing hurt to its pride or identity. I think the Hindus have lost this capability.

Every politician and many institutions in the country are competing to hurt Hindu sentiments in the race to appease other groups. This is being done with the clear intent to gain in votebank politics. Who is to be blamed for this shameful disregard to Hindu sentiment? Any community which cannot stand up for its institutions or its symbols, or is a silent spectator to the ridicule of its pride, must go down unsung in history. It is better for it to perish than to lead this shameful existence.

Petty politicians like Jayalalithaa have become bold enough to act in concert to malign a 2500-year-old Hindu institution. This institution represents the greatest philosopher and unifier of the country. Shri Adi Shankaracharya had a clear vision to establish Shankar Mutts in the four corners of the country as seats of knowledge, public service and national integration.

They say nobody is above the law. Only fools buy this argument. In our country, not only do criminals roam free but they also occupy seats of power. Else, how can you explain persons like Shibu Soren occupy- ing high positions and Raja Bharyya, who is a hardened criminal, be-coming a minister in the government? Yet this argument is being used to arrest a respected personality without proving his guilt and staging his trial by media through selective leaks.

In the Mahabharata, it is said that public ridicule of any respected person is a punishment worse than killing him. Yet what have so-called leaders done with Shankaracharya ji? We are all mute spectators to this heinous crime.

The law was bent in the Shah Bano case to appease one community. A religious leader of the community was not taken to court because it may have created a difficult law and or- der situation and the case against him was dropped. But then, those were treasured vote banks.

It is a good thing to be liberal in one's thoughts and deeds. Indeed, "Vasudhaiva Kutumbakam" (the world is one family) is a great philosophy. But when this very philosophy becomes our weakness, then it is the duty of every thinking and proud individual to set it aside and fight for his rights and demolish those demons who are creating a divide and rule politics. "Arise awake and stop not till the goal is reached thus spoke Swami Vivekananda. He further said, "Say with pride that I am a Hindu".

The writer is a member of the BJP's Central Intellectual Cell.

Take up the right issues

 Take up the right issues

By Gopal K Agarwal,

UPA should set its priorities right and stop ignoring questions of national interest, say

It's time the citizens of the coun I try took a firm decision They should either accept the hypocrisy of the current regime with regard to policies like secularism, economic reforms and creation of employment opportunities on the one hand and its indifference to in ternal security on the other, or they should prepare to confront the Government to answer certain ques tions before the nation.

Everybody will accept that there cannot be any compromise as far as the security of the country is concerned. It is an established fact that Pakistan is involved in cross-border terrorism and India has been trying to convey this to the whole world. But the recent joint statement of Prime Minister Manmohan Singh and President Musharraf was conspicuously missing the above point. It seemed to convey a shift in India's stand on the issue. There is a sudden spurt in violence in the Northeast, where Pakistan's ISI's involvement is suspected. But both the Home Minister and the Defence Minister seem helpless about it.

More worrisome is the Congress's dillydallying on the issue of illegal Bangladeshi immigrants. General SK Sinha, the former Governor of Assam, in his report to the then President, had pointed out that large-scale illegal immigration from East Pakistan (now Bangladesh), over several decades, has been altering the demographic complexion of the State. These demographic changes are a major cause of concern, he had further pointed out, which can lead to severing of the entire Northeast from the rest of the country. This will have disastrous strategic and economic consequences. Even countries like Malaysia have taken a tough stand on the issue of illegal immigrants. But our Government, in its zeal to please the minority, cannot take tough decisions.

The Congress is resorting to the rhetoric of its "secular" credentials and hypocritically trying to please the minority. It has set up a commission on the reservation for minorities. which was stalled by the Election Commission. Further, the announcement of reservation to mi norities in Andhra Pradesh was quashed by the High Court. I must add that all the rhetoric about secularism by these people is based on deception, of which all of us are well aware. Yet it persists.

Most people of the country will agree that we need a strong and effective law to combat terrorism but this Government has repealed POTA and has not brought any law in its place. The Government could have modified some provisions. The discovery of explosives in the form of scrap shows the recklessness of our Government in handling the sensitive issue of internal security. At the present juncture, any compromise with the internal security of the country is unacceptable and the Government should come out with a firm stand.

Internal security is not the only issue of concern. A lot of confusion has been spread about economic reforms mainly due to differences in thinking of the Congress and the Left parties- whether it is foreign direct investment, PSU's disinvestments or panel of experts in the Planning Commission. If India has to progress economically, it requires a clear-cut direction and roadmap.

Then, look at the hypocrisy of the Left. In West Bengal, they are taking help of foreigners, but at the Centre, they are opposing it. They don't want the disinvestment of PSU's and want to keep them as their fiefdom. The Left would like them to bleed and would continue wasting the exchequer's money. People know that many of the PSU's are being misused by ministers and are working with complete inefficiency to the extent that they have not even completed their accounts for several years Such wastage of money will con- tinue. The Finance Minister wants to unleash a reign of terror in the name of tax collection. He is giving draconian powers to raid, harass and confiscate properties of the taxpayers to a level of an inspector in a department which is known to be the most corrupt of all the Government departments.

There are many major issues where the present Government should concentrate-like controlling spiralling inflations, creating employment opportunities as promised. putting new life to road construction. building social security network. keeping the rising interest rate under control and, most of all. Strengthening internal security. But it diverts public attention by raking up emotive issues like removing Veer Savarkar's plaque from the Cellular jail, arresting Ms Uma Bharati on the issue of hoisting Tiranga, making noise over detoxification of the educational system. All this while it could have easily reviewed the portions which it found objectionable. It is going to the extent of creating a situation in which the Opposition is provoked continuously, especially when the Leader of the Opposition is not allowed to speak in the House. The Opposition is further provoked when a group of ministers is set up to review every decision of the past Government.

It is time the Government got down to constructive work. It must get rid of vindictiveness and authoritarianism and stop victimizing people of different ideology. By appointing its own persons, the UPA Government is being instrumental in destroying some of our great institutions which have been established by our forefathers.

(The writer is National Convener, BJP Economic Cell.)

Where taxpayers are full of fear

 Where taxpayers are full of fear

By Gopal K Agarwal,

India had draconian tax laws which harassed honest taxpayers Compliance was difficult. Non-compliance was at a premium and led to generation of black money, which was not available for investment and economic development. There was a growing understanding that if the government has to increase tax collection, more people have to be brought under the tax net.

Government recognised that this requires simplified and ra- tionalised procedures Laws must be made less draconian. the tax department friendly to the assessee. Successive budgets were moving in this direction. The NDA government set up the Kelkar Committee on tax reforms. The widespread discussion on its recommendations helped in creating a positive environment.

The government has to work with the premise that citizens are honest and law-abiding, any action against them can be taken only when proved guilty. This is a basic law of jurisprudence and will have to be adhered to, or the re is a danger that the country will see a rise of state terrorism, wh ich will justify all action under the guise of enforcing compliance.

Certain provisions in the recent budget amount to state terrorism. The finance minister is creating an extremely unhealthy environment for taxpayers. He has been directing tax officials to ensure increased tax revenues. They have been given targets.

These targets are passed down the line. The officials work out a collection strategy and identify parties from whom mobilisation can be done. The income tax of officer is revenue-minded and makes an addition to a taxpayer's account in order to meet his mobilisation target. The Commissioner of Income Tax, Appeals, is revenue-minded and upholds orders passed by the income tax officers.

The taxpayer approaches the judiciary. The nightmare gets worse when the finance minister wants to influence the judiciary so that it does not grant any relief. Taxpayers are informed that an addition is being made to their income and unless they pay up, their assets will be attached. If they protest they are told that they can go in for appeal to have the additions reversed and have their assets released. The situation is tailor-made for extortion Further, the FM has directed the tax department to resort to harsh measures like surveys and raids. The victim pays a huge amount of money to be allowed to carry on with his life and business. Laws like informing the tax department of any purchases above Rs 50,000 can only lead to harassment of the general public. It is not just applicable to single transactions but to the aggregate amount. Even assesses who will pay no tax will be included, the report will have to be in a computer-readable form, and figures relating to the beginning of the financial year would have to be furnished.

TDS was to be implemented when the tax information network was complete. People were to be protected from the hassle of seeking TDS certificates by having TDS deductions reported directly to tax authorities and entered into a central database. Each taxpayer would have access to the database through a Permanent Account Number (PAN) identification and password. The database is nowhere in sight, but the budget has gone and changed the TDS reporting requirement. Amendments to section 203 and Section 203 AA say that TDS details should now be sent to the income tax authority or a person authorised by it and no certificate is required to be issued to the person whose tax is deducted. This means that people whose tax is compulsorily deducted will not even have a piece of paper to prove their tax payment. And they will be at the mercy of income tax officials to get TDS certificates.

A new section, 277A, has been introduced in the Income Tax Act, where the assessing officer for the purpose of filing a complaint of prosecution u/s 277A, has to simply record the intention of the third party to abet the tax evasion and not to substantiate his charges. The explanation to the proposed section provides it shall be sufficient in any charge to allege the general intent to enable such other person to evade any tax, penalty or interest.

Explaining the concept of tax on securities' transactions, FM said in his budget speech that it is to simplify the taxation of capital gains. The new proposals are neither simple nor revenue yielding. To keep track of such transactions and ensure that the tax payable is correctly worked out and paid would be an uphill task. The objective of generating more money for the government would be frustrated.

Service tax is in the form of double taxation and has a cascading effect. It is successively being increased without relief in the direct income tax. The government will have to make laws simple, non-draconian and introduce checks on the income tax officials. The only way India can be a true welfare state is by providing economic freedom to its citizens. Else, all the rhetoric about the government being a welfare state is merely lip service.

(The writer is a member BJP's Central Economic Cell)

Tax as state terrorism

 Tax as state terrorism

By Gopal K Agarwal,

Certain announcements and provisions in the recent budget by the Finance Minister amount to state terrorism. The FM is creating an extremely unfortunate and unhealthy environment for taxpayers.

India had draconian tax laws, which harassed honest payers. Compliance tax was extremely difficult. Persons came into the tax net either through salary income or voluntarily, for their zeal to be law-abiding citizens. Non- compliance was at a premium and led to generation of black money, which was used in wasteful expenditure and was not available for investment and economic development of the country. There was a growing understanding in the government that if the government has to increase tax collection, then more and more people have to be brought under the tax net. Merely increasing tax rate was becoming counterproductive to the economic development of the country and was harming entrepreneurship.

The government recognised that this will require simplified and rationalised procedures and laws are to be made less draconian with the spirit of dealing with honest citizens. The tax department has to be made friendly to the assessee. Successive budgets were moving toward this direction.

The previous NDA government set up the Kelkar Committee to give report on tax reforms and the widespread discussion on its recommendations helped in creating a positive environment.

The government has to work with the premise that citizens of the country are honest and law-abiding and any action against them can be taken only when proved guilty. This is a basic law of jurisprudence and will have to be adhered to at any cost, otherwise there is every danger that the country will see rise of dictatorship and state terrorism, which will justify all its actions under the guise of enforcing compliance. There are four pillars of democracy and each has a role to play, there cannot be any overlap in their roles. Recently, there has been a growing tendency in the bureaucracy, which is involved in the formulation of various laws to take upon themselves and assume judicial powers. In India the judiciary has always upheld the constitutional rights of the citizen. Indian judiciary has exercised control over politicians and bureaucrats. This is required for balancing the power structure of the country, otherwise the nexus between the corrupt politicians and bureaucrats will leave little space for the people to lead a peaceful and a dignified life. Judiciary derives its power from the laws of the land. The laws should be equitable and fair to all, without giving undue powers to government officials. There has to be a counter-check so that these laws are not misused by corrupt or overzealous officials.

Certain announcements and provisions in the recent budget by the Finance Minister (FM) amount to state terrorism. The FM is creating an extremely unfortunate and unhealthy environment for taxpayers. In his meetings with tax officials, he has been directing them to ensure increased tax revenues. They have been given targets. These targets are passed down the line. The officials work out a collection strategy and identify parties from whom mobilisation can be done The Income-tax Officer is revenue-minded and he makes an addition to a taxpayer's account in order to meet his mobilisation target. The Commissioner of Income-tax (Appeals) is also revenue-minded and he upholds the orders passed by the Income-tax Officers. A taxpayer approaches the judiciary. The nightmare gets worse when the Finance Minister wants to influence the judiciary so that it does not grant any relief and if any relief exists, then vacate them. Tax-payers are informed that an addition is being made to their income and unless they pay up, their assets will be attached. If they protest, they are told that they can go in for appeal to have the additions reversed and have their assets released. The situation is tailor-made for extortion.

Further, he has directed the Tax Department to resort to harsh measures like surveys and raids to increase compliance. The raid can sometimes last for days, and by the end of it, when the victim is finally broken down with humiliation, sleep deprivation and other terror tactics, the head of the raiding party usually comes forward with a "deal". The victim pays a huge amount of money-depending on how much he has to be allowed to carry on with his life and business without being harassed daily by the Income Tax Department.

It is an open fact that the Income-tax Department of our country is one of the most corrupt departments of the government. The corruption in this department affects the life of a common man to a great extent as it involves public dealings. If these corrupt government officials are given draconian powers it will only lead to harassment of the ordinary citizens and may be misused by some of these officials to extract money.

Several other laws like informing about any purchases above Rs 50.000 to the Tax Department u/s 285BA, can only lead to harassment of the general public. It is leading to several Certain announcements and provisions in the recent budget by the Finance Minister amount to state terrorism. The FM is creating an extremely unfortunate and unhealthy environment for taxpayers. complications as it is not just applicable to single transactions, but to the aggregate amount, it could apply to aggregate of all transactions under five separate heads, it could include even the total household expenditure if it exceeds Rs 50,000 a year, even assessess who will pay no tax will be included The report will have to be in a coraputer-readable form and figures relating to the beginning of the financial year would also have to be compiled and furnished.

TDS had to be implemented when the tax information network was complete People were to be protected from the hassle of seeking TDS certificates by having TDS deductions reported directly to the tax authorities and entered into a central database. Each taxpayer would have access to the database through a Permanent Account Number (PAN) identification and password. The database is nowhere in sight, but the Budget has gone and changed the TDS reporting requirement. Amendments to Section 203 and Section 203 AA says that TDS details should now be sent to the income-tax authority or a person authorised by it (NSDL) and no certificate is required to be issued to the person whose tax is deducted This means that people whose tax is compulsorily deducted will not even have a piece of paper to prove their tax payment Worse, they will be at the mercy of income-tax officials to get TDS certificates.

A new Section 277A has been introduced in the Income tax Act, where the assessing officer for the purpose of filing a compliant of prosecution u/s 277A, has to simply record the intention of the third party to abet the tax evasion and not to explain or substantiate his charges The concept of mens-ria is completely missing. The explanation to the proposed Section 277A provides that it shall be sufficient in any change (without specifying any particular instance or sum of tas penalty or interest which has been or would have been evaded by such other person) to allege the general intent to enable such other person to evade any tax, penalty or interest The Section provides punishment with rigorous imprisonment for a term not less than three months but which may be extended to three years and with a fine imposed.

Explaining the concept of tax on securities transactions the Finance Minister said in his budget speech that it is being done to simplify the taxation of capital gains The new proposals are neither simple nor revenue-yielding. To keep track of such transactions and ensure that the tax payable is correctly worked out and paid would be an uphill task. Further, the changes would mean substantially lower revenue for the government, and thus, the objective of generating more money for the government would be frustrated. The issue is whether the complicated exercise prescribed by the government is worthwhile. The scheme, which was intended to simplify the taxation of capital gains, has ended up being highly complicated, and has laid down multiple and complicated slabs which will be very difficult to implement and monitor. It is very surprising that no empirical studies were made before announcing the changes on the impact of the tax and on different segments of market players.

Service tax is in the form of double taxation and has a cascading effect. It is successively being increased without relief in the direct income tax. The government will have to sincerely sort out many of these complications and it has to make the laws simple, non-Draconian and conduct counter checks on the actions of income-tax officials

The only way India can be a true welfare State is by providing economic freedom to its citizens, otherwise all rhetoric about the government being a welfare State are merely lip service.

The author is member of BJP Central Economic Cell

Chidambaram and his Package of Contractions

 Chidambaram and his Package of Contradictions

By Gopal K Agarwal,

The internal contradiction in the present government due to differences in the economic thinking of the Congress and the Left does not leave any room for economic innovation. This is coming out very clearly in the criticism of the Budget by the Left Front.

In the Budget speech of the Finance Minister there is lot of lip service to rural development but there are no concrete provisions or announcement of policies. Almost all the policies of the NDA government are being continued. Instead of giving support to the small-scale sector, 85 items have been dereserved. Secondly, he has spoken a lot on education and has imposed a cess of 2 per cent across the board on all taxes, but it has not been clarified or spelled out as to how this fund will be spent and will this amount be in addition to the amounts earlier being earmarked for education in the Budget? In our bureaucratic set-up, implementation has always been the problem. If the government does not specify as to how the benefit will be delivered to the actual ultimate beneficiary, all the well intentions will not bear results. If all these funds are left to the states to be utilised then it will be a big failure. Our states have poor infrastructure and corruption being widely prevalent, many of the allocated funds to states are not being properly and fully utilised.

Thirdly, the FM has announced that a consortium of private banks will give loans to the tune of Rs 40,000 crore for infrastructure development. This kind of announcement regarding intentions of the private banks has no meaning as these will be commercial decisions and its credit cannot be taken in the Budget.

Fourthly, the announcement in the field of water conservation that wells, talabs, etc., will be repaired and renovated is also an eyewash as this will be done over a period of ten years and that too without any fund allocation. To meet his revenue requirements, the FM has stated that there will be a 40 per cent increase in revenue collection from corporate sector only, without there being any increase in tax rates. He plans to achieve this through greater and stricter compliance of tax laws which is highly unrealistic and impractical.

After criticising so much on the disinvestment policy of the NDA, he is continuing with the disinvestment of NTPC, a profit- making company, and has also announced setting up of a Disinvestment Commission.

The Left Front's rhetoric of opposing FDI in strategic sectors has been given a raw deal by announcing increase in FDI in all the three strategic sectors of telecommunication, aviation and insurance. Telecommunication is one sector in which even USA does not allow majority holding to foreign investments. Even NDA government was reluctant to increase this limit

The major announcement of tax concession in the direct tax on the taxable income up to Rs one lakh is a more of a confusion and a complete eyewash. It would have been much better if instead of this, the basic exemption limit of Rs 50,000 had been increased. This will create resentment in anybody having even slightly higher taxable Income than Rs 1,00,000.

The increase in service tax by 25 per cent of the earlier level (8 per cent to 10 per cent) will also have inflationary effect. Service tax has a cascading effect and the government needs to control inflation to control fiscal deficit, which is already showing signs of increase. Further, the increase in the excise tax on steel will also be inflationary as this is a basic metal and will harm housing sector also.

The imposition of unreasonable transaction tax on all transactions is a big blow to the securities market. The government has not applied its mind as to whether this can be absorbed or will it completely kill the capital and bond market? Levying transaction tax is bad, as firstly, all transactions do not lead to profit, secondly, 80 per cent of the stock market turnover is either arbitrage business or jobbing transactions at a very meagre price difference of as low as five paisa This will lead to a complete erosion of liquidity in the market which is very essential for recovery reducing impact cost (ie. the effect of bulk purchase order on the price of a scrip). Even without this step, the market was very nervous on the policies of the UPA government and the influence of Left parties thinking on the economic policies.

The low interest regime of the NDA government which was a major factor facilitating industrial development and the housing sector, etc., is showing a sign of reversal as the interest rates are firming up. If this government does not take major initiatives, which are missing in the Budget, then we may see a major reversal in our country's economy.

(The writer is National Convener, BJP Economic Cell.)

Reversal in economy is likely

 Reversal in economy is likely

FM has paid lot of lip services to rural development without concrete announcement of policies, says Gopal k  Agarwal

The Government has turned out to be a damp squib. The Congress and the Left, earlier highly critical of the economic policies of the NDA Government, were expected to give a clear direction to the country's economy. The UPA Government inherited a healthy economy with very strong fundamentals, burgeoning foreign exchange reserves, a economic growth of eight per cent, fiscal deficit and inflation under control and a booming stock market. All these were the result of the sound economic policies pursued by the NDA Government. Everybody expected the Congress and the Left Front to implement their distinct policy statements in this Budget. However, the ideological differences in the economic thinking between the two does not leave any room for economic innovation. This has come out very clearly in the criticism of the Budget by the Left Front.

First, in his Budget speech. Finance Minister P Chidambaram paid a lot of lip services to rural development without concrete announcement of policies. Almost all the policies of the NDA Government are being continued. Instead of providing support to the smallscale sector. 85 items have been dereserved.

Second, Mr Chidambaram has spoken so much of education and has imposed a cess of two per cent across the board on all taxes, but he has not spelled out as to how this fund would be spent. Will this amount be in addition to the amount earmarked for education earlier? In our bureaucratic setup, implementation of policies has always been a problem. If the Government does not specify how the benefit will be delivered to the actual beneficiaries, all the good intentions will not bear fruit.

Third, Mr Chidambaram has announced that a consortium of private banks will give loans to the tune of Rs 40,000 crore for infrastructure development. Announcements regarding intentions of the private banks will have no meaning as these will be commercial decisions, and its credit cannot be taken in the Budget. Fourth, in the field of water conservation, Mr Chidambaram's announcement that wells, ponds, etc.. will be repaired and renovated is also an eyewash as this will be done over a period of 10 years and that too without any fund allocation.

To meet revenue requirement, Mr Chidambaram has stated that there would be a 40 per cent increase in revenue collection from the corporate sector only without there being any increase in the tax rates. He plans to achieve this through greater and stricter compliance of tax laws which is unrealistic and impractical.

After criticising so much the disinvestment policy of the NDA Government, Mr Chidambaram, in continuing with the disinvestment of NTPC, a profit-making company, has also announced the setting up of a disinvestment commission.

The Left Front's rhetoric of opposing FDI in strategic sectors has been given a raw deal by announcing increase in FDI in all the three strategic sectors of telecommunication, aviation, and insurance. Telecommunication is one sector in which even the US does not allow majority holding to foreign investors.

Tax concessions in income tax on the taxable income of up to Rs 1 lakh is creating confusion. It would have been much better if instead the basic exemption limit of Rs 50,000 was increased. This will create resentment to anybody having even a slightly higher taxable income of more than Rs 1,00,000.

The increase in service tax by 25 per cent of the earlier level of (eight to 10 per cent) will also have an inflationary effect. Service tax has a cascading effect and the Government needs to control inflation to control fiscal deficit, which is already showing signs of increase. Further, increase in excise tax on steel will also be inflationary as it is a basic metal for infrastructure development. and will harm the housing sector too. The imposition of the anretisonable transaction tax on all securities transactions came as a big blow to the securities market. It seems the Government has not applied its mind as to whether this can be absorbed or will it completely kill the capital and bond market. Transaction tax is bad as every transaction does not lead to profit. Second, 80 per cent of the stock market turnover is through either arbitrage business or jobbing transactions at a very meagre price difference of as low as five paisa. This will lead to complete erosion of liquidity in the market which is very essential for true and fair price discovery and for reducing impact cost (that is, the effect of bulk purchase order on the price of a scrip).

The low interest regime of the NDA Government, which was a ma- jor factor in facilitating industrial development, housing sector, etc., is showing signs of reversal as interest rates are firming up. If the UPA Government does not take major initiatives, which are missing in the Budget, then we may soon see reversal in the country's economy.

(The writer is member, Central Economic Cell, BJP)