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May 14, 2015

Living up to people’s expectations


May 14, 2015

The well-established dictum puts it quite succinctly: no taxation without representation. This certainly is a basic norm with deep ramifications. Simply put, it would mean that in a democratic dispensation, it is the elected representatives of the people who should debate and decide as to what kind and how much taxes should be levied in the annual budget. The irony is that the budget put together by a ruling party government sails through the legislature without much debate and with only such changes which may be more rouge than relief.
As a matter of tradition, the governments in our own case, tend to provide about three week’s time to debate the new financial provisions which, quite often, are so complicated that even grasping them fully and comprehending their overall impact on various sectors of society might be quite an uphill task. The leader of the opposition, some other political leaders in the house and members, of course, do take part in budget discussions but generally overall disinterest is observed.
Though the Finance Ministry does solicit pre-budget suggestions from economic experts, business community and corporate sector but it is the post-budget discussion that assumes much greater importance. It might not be possible for the members sitting on the treasury benches to criticise the budget proposals due to party discipline, but the bigwigs in the parliament sitting on opposition benches carry a far greater responsibility in this behalf.
The observation of the National Assembly’s Committee on Finance, Statistics and Privatization that it has not been given the opportunity to add its share of proposals to the formulation of the budget needs to be looked into. After all, the input from this august body could be helpful, as it has been dealing with the subject for considerable length of time. How much its input is to be taken or not remains the government’s prerogative. But their plea merits serious consideration.
A budget may be

seen from three perspectives. It should be seen as to how it is going to push forward the economy leading to higher growth and employment generation. A large number of people have been entering the job market every market and the budget should focus on initiating measures which results in opening new job opportunities for the people. For the elected representatives of the people, the greater responsibility in the area of looking at the budget is as to how it was going to affect the price behaviour. In our case, traditionally the budgets have been leaning heavily on indirect taxes. The problem with indirect taxes is that their incidence falls on the cross-section of the society and hence further increase in such measures should be avoided as far as possible.
For years together, it has been argued that the tax base should be broadened. It is also necessary that unnecessary exemptions should go. The subsidies should be targeted and not be available to those who might not need it or qualify for that. Looking from yet another perspective, the budget should move the economy towards self-reliance and reduce its dependence on debt and borrowings. It has already been made quite clear that in the forthcoming budget, the government would lay particular emphasis on economic consolidation. That would mean measures to boost economic growth, contain budget deficit, keep on building foreign exchange reserves and have a stricter control on prices. It is fair to assume that the budget would avoid adding to the tax burden of the people who have been having some hard times for a couple of decades.
Though social sector development is now mostly the responsibility that falls within the domain of provinces which have yet to put their act together in this behalf despite huge resources at their disposal after the last NFC award, the Federal budget ought to give more focused attention to education, health and other such services.
The new development programme will lay emphasis on infrastructure projects, energy and communication networks. But a substantial allocation for social sector development could be the litmus test of the planners o f their concern for the people’s welfare. The elected representatives of the people would do well to watch the interest of the people as a paramount obligation.

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