'I rate this Budget as the worst since 1947'

Dr Subramaniam Swamy

The BJP does not have an economic programme and relies on bureaucratic proposals which lack a vision and a strategy. The recent setback in elections is because the economy has been sliding downwards since 1998 in terms of growth in GDP and in the performance of the manufacturing sector. This has had an adverse effect on unemployment.

Inflation is already quite low and therefore the main objective of the Budget has to be to promote and accelerate growth. This the Budget has not done and hence the stock market has reacted badly.

There are a number of adhoc measures for agriculture. But that is not enough. What is necessary is an integrated strategy to enable farmers to export their products under the WTO provisions.

For this, infrastructure like roads, airports, cold storages and efficient clearances have to be put in place. Again for that, there is nothing in the Budget. Furthermore, farmers are unable to treat India as a single market because the socialist restrictions on grain movement are still there.

This budget has disappointed all. The stock market and the common man have reacted adversely for different reasons. The former because there is no fillip for capital investment in the budget and the latter because the prices of kerosene, LPG et. have been raised.

In terms of the current political situation, the only ally of Mr Vajpayee is Mrs Sonia Gandhi who never rises in Parliament to put him in a fix. I expect a dramatic political change by September. I expect that both Vajpayee and Sonia will be out by then and a new patriotic secular alternative will emerge.

Already, the stockmarket has reacted very sharply. The economy requires a boost in growth rate which in turn requires a sharp rise in the rate of domestic savings and in productivity. The Budget on the contrary by lowering the interest rate on provident fund has created the opposite effect.

The middle class should unitedly vote for that political party which advocates abolition of income tax. At the moment, there is only one party so advocating which is the Janata Party headed by me. Evading tax is illegal.

Income tax if abolished by an executive order will mean a loss of Rs 200 billion in a Budget which is ten times that. After abolition, the rate of savings will shoot up, the stockmarket will boom and the growth rate will increase. In turn, the indirect tax will also increase.

According to my book, "Economic Performance and Reforms in India," published by Konark, the 'increase in indirect tax revenues will be Rs 400 billion i.e. double the loss of direct tax revenue. So, we must know how to take actions which look risky but have high rewards.

To overcome the economic crisis, we need to take the following steps:
1. Abolish income tax
2. Declare Mumbai and Tuticorin as free ports
3. Create a water grid of southern rivers from Mahanadi to Vaigai
4. Make expenditures for education, transportation and medical care of employees tax deductable for corporations that meet these expenditures.

Time and again, it is the sincere tax payer who is asked to pay more. The rich do not pay tax to any great extent because their chartered accountants find exemptions for them for tax deduction. The poor are not in the tax bracket. Hence, the middle class professional gets it in the neck. That is why I want income tax abolished.

People say my fault is that I speak out everything bluntly. Frankly speaking, this Budget will undermine the Indian people.

I rate this Budget as the worst since 1947. It has no head, no tail, no direction. I am not surprised because nothing better can be expected of Yashwant Sinha.

This Budget is the financial obituary of the NDA government. The cremation ceremony will probably take place this September.

Budget is a tremendous instrument but if people decide to vote for a party merely because they demolished a mosque and promised to build a temple, why should you expect anything better? During the Congress period, the public voted for Soviet style socialism which has failed all over the world. Hence, people get the government they deserve.

If I were the FM, what I would have done differently is to adopt those measures which would revive the enthusaism of the investor and the middle class. For this purpose, I have suggested five measures. First, abolition of income tax. Second, water grid of southern rivers from Mahanadi to Vaigai.

Third, making Mumbai and Tuticorin as free ports. Fourth, to make tax deductible expenditure by corporations on workers welfare such as education, social security, transportation and medical care. Fifth, I would amend the labour laws to incoporate hire and fire principle subject to the fired employee getting three years salary by cheque delivered at his residence if he is not reemployed elsewhere earlier.

Dr Subramaniam Swamy is Janata Party President.

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