Budget merger

Budget merger: This refers to the report, ‘No Railway budget from next fiscal’ (August 15). The proposal to merge the Rail Budget with the Union Budget needs to be seen as part of the reform ...]

Budget merger

This refers to the report, ‘No Railway budget from next fiscal’ (August 15). The proposal to merge the Rail Budget with the Union Budget needs to be seen as part of the reform process. Many components of economic reforms have hit road blocks, including structural reforms in the financial sector, some emanating from the weakness of alliances in power at the Centre and in the States. Once the two budgets are merged and major taxes are aggregated through the mechanism of GST, the Centre’s responsibility to plan resources and ensure distributive justice across geographical regions and various sectors of the economy rises.
Among other things, it will have to ensure that windfalls are used for investment purposes and not for freebies. Cross-subsidisation by using surpluses of revenue-generating sectors for the benefit of the social sector and for long-term investment in infrastructure will have to continue. Provision must be made for expected and unexpected heavy expenditure. Provisions for meeting pension liabilities and retirement benefits should ideally form part of current revenue expenditure. The claims of less developed and less literate areas should be met, preferably from a dedicated fund to be created for the purpose. A prices, wages and income policy covering government and private sectors should guide the market and employers.
MG Warrier
Mumbai





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