The Hindu Business Line : A Bill of contention

THERE HAS CLEARLY been a bit of political grandstanding both by the Opposition, under the National Democratic Alliance umbrella, and the Government over the memorandum of changes to the Finance Bill, sought by the NDA. The Prime Minister's refusal even to go through the motions of formally accepting it could well be regarded by some as somewhat churlish. After all, in a democracy, the people, which would of course include members of the Opposition parties, have a right to petition the government on any aspect they think is important. It is another matter that the government of the day may not deem it to be in public interest to concede them. As such, by accepting the memorandum, the Prime Minister would be only discharging a customary function of his high office.

But, on the other hand, the issue is not entirely one of form but the substance of democratic functioning, as well. If the NDA was so mindful of public interest in seeking certain changes to the provisions of the Finance Bill or appropriations out of the Consolidated Fund, surely it ought to have raised these issues in Parliament much in advance, even if its sensibilities have been hurt to the point of stalling the proceedings of the House on account of certain actions of the Government. Clearly, by presenting its demands on the day before the Lok Sabha was to consider passage of the Finance Bill, the NDA was putting the Government in a quandary. While the Government could not have dismissed them peremptorily, yet any commitment to evaluate the demands would mean postponing the passage of the Bill. That too would have been next to impossible considering the logistics involved in completing well in time the constitutional process of public spending for the current fiscal.

In all this, the true casualty has been the proper legislative scrutiny and public debate on contours of fiscal policy of the present Government. As it happened, the Government has, either prompted by public concerns or acting on its own, come out with certain amendments to the Bill, chief of which is the removal of anomaly on taxation of incomes of those drawing marginally higher than the revised base limit of exemption of Rs 1 lakh, proposed in the Budget. This is clearly to be welcomed as it is customary to provide some relief to those at the margin of the minimum exemption limit and the absence of such a provision till now has been a defect. It has also decided to defer to the next financial year, the taxation of the interest income on deposits of non-resident Indians demonstrating its caution on the subject. But it is a moot point if this would really assuage the NRI anxiety on this score. Since the concept of taxation of such interest incomes is in itself not being given up, such of those who do not wish to get entangled with local tax authorities are bound to hesitate to park their surpluses with domestic banking entities. But the events leading up to the passage of the Budget have nevertheless thrown up certain policy issues. While agreeing to expeditious approval may demonstrate a certain sense of responsibility in securing fiscal stability, it is worrying that this should be achieved without proper public debate on the underlying policy construct.

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