Back A quick tour of the Budget for the hassled
There is little escape for accountants from Budget-related discussions, especially during the countdown and the immediate aftermath.
Now that the B-Day is behind us, you can put to rest crystal-gazing skills at least till next February, and focus on the analytics. This means you need to be armed with essential knowledge about at least two things, viz., the Finance Minister's speech and the Finance Bill.
On the first, that is, the 13,000-word text that Mr P. Chidambaram read through on February 28, let me offer a quick tour for the hassled.
Warm-up quiz
Stoke up your neurons with rapid answers to the following ten questions, all of which have answers in the Budget Speech.
1. After saying `the perceptive leadership of the Prime Minister' the Finance Minister spoke of `the palpable confidence'. Of whom?
2. Name our `mount', `companion' and `destination'.
3. Government intends to present a ____ Budget on the first Outcome Budget before the end of the Budget Session.
4. What are the two `expert' bodies that find mention in the Speech?
5. Remember the two occasions when `monitor' crept into the rhetoric?
6. To help farmers who have availed themselves of crop loans, an amount equal to ____ percentage points of "the borrower's interest liability on the principal amount up to Rs 1,00,000, will be credited to his/her bank account before March 31, 2006".
7. "After giving anxious consideration to market conditions, Government has decided to ensure that the farmer receives short-term credit" at ____ per cent, with an upper limit of Rs ____ lakh on the principal amount.
8. Expand NDS-OM.
9. "After 20 years, the Gross Fiscal Deficit was less than the Gross Budgetary Support for Plan in 2004-05." What does this mean?
10. In paragraph 144 the Finance Minister mentioned five different types of `ware'. What were they?
Answers
1. Of "the Indian people that their future is in safe hands."
2. "Growth will be our mount; equity will be our companion; and social justice will be our destination."
3. Performance.
4. High-level expert committee on corporate bonds, and another to look into the potential of the gems and jewellery sector.
5. One, the Finance Minister intends to monitor `closely' progress in farm credit; and two, the Prime Minister has decided to constitute an Empowered Group of Ministers to oversee cluster development and monitor progress.
6. Two.
7. Seven, three.
8. Negotiated Dealing System — Order Matching, the anonymous electronic trading module from the RBI.
9. Means, "the Government is not financing the Plan entirely through borrowing."
10. "I propose to remove rate differences between different kinds of tableware and kitchenware," said the Finance Minister. "Consequently, glassware will attract excise duty of 16 per cent on par with ceramicware and plasticware."
Five things to find
If you have downloaded the speech, don't fret that it runs to 78,000 bytes. Have Ctrl+F handy to search and locate the following five key words and phrases.
One, the `aam admi' or the common citizen. He comes in two places. First, when the Finance Minister looks back with satisfaction that the promises made to him "have been substantially redeemed", without waiting for any confirmation from his end.
And second, when the Finance Minister `underscores' the "resolve to ensure that the intended services in the right quantity and quality are delivered to the aam admi."
Two, `innovation'. Apart from "the National Agricultural Innovation Project for research at the frontiers of agricultural science" to be launched in July 2006, the Finance Minister took credit for an innovation in Budget: `statement on revenue foregone, known worldwide as tax expenditure statement' to capture "the departures from the normal tax regime". This comes in the line of previous `innovations' such as the Gender Budget and the Outcome Budget.
Three, `laundered'. The Finance Minister told us the story of how the Government came to know that Rs 1,500 crore was `laundered' over 18 months by entities that deposited demand drafts in their own accounts and withdraw the cash. And of how this scam came to light through the trail left by BCTT (Banking Cash Transaction Tax). One learns that BCTT also helped "the Department detect bogus bills, accommodation entries, artificial loss claims and dummy firms".
Four, `flagship programmes', dealt with in a whole section of the Speech. There are eight flagship programmes, viz.,: "Sarva Siksha Abhiyan, Mid-day Meal Scheme, Rajiv Gandhi Drinking Water Mission, Total Sanitation Campaign, National Rural Health Mission, Integrated Child Development Services, National Rural Employment Guarantee Scheme and Jawaharlal Nehru National Urban Renewal Mission." Usually, `flagship' is usually only one, such as "the finest, largest, or most important one of a series, network, or chain," as Merriam-Webster Online Dictionary defines.
Five, `windows'. The Finance Minister has asked banks to open "a separate window for self-help groups or joint liability groups of tenant farmers". He proposes to open a separate window for rural roads. "A window to access ECB funds has also been opened." NABARD will create "a separate window with a corpus of Rs1,000 crore for refinancing loans" to food processing sector. And, the India Infrastructure Finance Company Limited (IIFCL) will create a window to provide equity participation and/or viability gap funding to new ventures.
Two projects to work at
Having sufficiently gone back and forth the Speech, you may now be ready for some activity. So, here are two project ideas. Brace up, this is the toughest part.
First, find out the meaning of the following: Levellised contribution, peri-urban centres, viability gap funding, ultra mega projects, access-controlled expressways, new alignment, deep draft port, `pause' button on fiscal correction, enabling concessions, and incubatee-entrepreneurs. Also, differentiate between horizontal and vertical equity, and anonymous and pseudonymous.
Second, use in sentences of your own the following phrases: Unrelenting emphasis, continued buoyancy, paradigm shift, engine of growth, soldier on, mission mode, actively promote, preferably focussed on, specific theme, thrust area, go the extra mile, the new frontier, deep and durable reforms, trigger a change in the mindset, up-scaling the size, unwind, `deepen, broaden and strengthen', and extensive discussions with stakeholders.
Raring to go to the next Budget analysis meeting?
D. Murali
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