New Delhi: The Union Budget is just a week away.
We can already hear experts like Swaminathan Anklesaria Aiyar and T N Ninan clearing their throats in anticipation of explaining the budget to a large section of population who cannot answer a question like ‘what is 12 +23’ without the help of options.
Anyway, when you hear the Finance Minister present the budget you realise you don’t understand economics. And when you listen to experts like Ninan and Aiyar, it dawns on you that you don’t know English as well, for they use words like fiduciary and pari passu.
So, at the end of the Budget day, people desperately switch channels even if it meant watching the 755th rerun of Three Idiots or that channel which hosts the Tamil equivalent of Kaun Banega Crorepathi where the toughest question is: What day is today? (The correct answer being: The one that is not ‘Chak De’, ‘Shobha De’ and ‘Rang De’ in the options list).
This year, we at Crank’s News have chosen to dejargonise it all, and empower you with the knowledge that when it comes to the Union Budget: You don’t need a Ninan or Aiyar. Practically, anybody can bulls***.
Fiscal Deficit: Let us explain this in practical terms: If you are earning Rs.10,000 a month, but spending Rs.15,000 a month, what will you get? Exactly. A huge credit card bill.
But governments work by a different method. They don’t have credit cards, and they have to fall back on their own irresponsibility and improvidence to live beyond their means.
In a democratic set up, governments need money for spending on the various welfare projects of the public. This they raise by way of levying taxes on the public. But with the money collected through taxes being not enough to even pay the salaries who carry out the task of, well, levying taxes, the governments these days are doing the financially smart thing: Hold back all the welfare projects, except those very important ones like enhancing the allowances of the legislators and parliamentarians.
The other thing the government is doing to save money is reduce the size of the government. This they are attempting by the commonsense approach of having one more department that will suggest ways and means to cut down departments.
Of course, the tried and tested method of various governments to tackle the burgeoning fiscal deficit is through the prudential policy decision of stating in every budget that the burgeoning fiscal deficit has to be tackled. It seems to have worked so far.
Inflation: When you bought a product or goods for, say, X rupees last week, and paid X + 5 rupees for the same this week, you, as a non-specialist in market economics, wouldn’t know whether the cost of living has gone up or not. But the governments, with the best of technology and economists at their command, not only figure this out but also do high-end research on this, like what was the figure last month, last year and so on.
The Planning Commission, which computes life-defining statistics, technically advises the government which area to focus its finances on so that the prices of essential commodities don’t rule beyond the common man’s reach, and the government, after weighing the various pros and cons of the suggestions, takes a very people-oriented view, like not shutting down a loss-making public sector undertaking so that it continues to serve the public by incurring more losses.
Indirect Tax and Direct Tax: The tax a business person individually cheats from paying is defined as Direct Tax, and the tax when the same business person on behalf of his company cheats from paying is called as Indirect Tax. A monthly salary-getter, under the present set of benevolent tax rules, enjoys full exemption from being able to cheat.
Ad valorem tax: This in Latin means, ‘at the value of’ or the ‘at the rate of”. And ‘ad valorem tax’ has to be that cess slapped on every email account by most middle-age men in India who continue to spell out the ‘@’ in every ID as ‘at the rate of’. By the way, any normal tax is defined as something that Vijay Mallya’s airlines is incapable of paying now.
Defence allocation: In classical Indian economy, this is defined as the amount of money whose allocation in the budget that Paksitan and China are unhappy with.
With Pakistan and China being peace-loving non-aggressive nuclear neighbours, it’s a puzzle to them as to why India would be needing in defence preparedness anything more than slingshots.
Apart from helping to buy arms and ammunition, we presume a big chunk of the defence budget goes into procuring the one thing that will serve as the true honour to those patriots of our military force — subsidised liquor.
(Disclaimer: For long, we in TN had a handy rule in life: If it was a Thirukkural at the beginning, it had to be a K Balachander movie, and if it was at the end, it ought to be P Chidamabaram presenting the Union Budget. We slept through both).