The 'never before-like' Union Budget is just a couple of days away. Expectations are galore, not just of the common man, but across industries. The coronavirus pandemic has eaten into all sectors, leaving behind a creaking financial system. Having suffered twin blows of coronavirus and economic slowdown, the country is looking for a healing touch this year. Undoubtedly, this is going to be Modi sarkar's most difficult budget, and a tough balancing act. India TV Digital spoke to Former Finance Secretary CM Vasudev, who advocated a one-time vaccine cess this year. He also spoke at length about various budget aspects, including generating new employment opportunities, tax relief to the salaried class, fiscal deficit and more.
Several reports claim that the government may introduce a coronavirus cess or surcharge on individual taxpayers in the forthcoming budget. A COVID cess could be levied on higher income groups. What's your take on it?
I feel the first charge on government expenditure this year should be on providing vaccine to the entire population. There can be no better stimulus than having a healthy and mobile work force. Vaccine should be provided free by Government. To fund this big exercise levy of a vaccine cess should be considered. But it should have a sunset clause of one year so that it remains a one time cess.
What should the government do for better employment, job opportunities for youth in India?
Loss of employment by large number of workers has been biggest casualty of the pandemic. Only fostering faster growth can create employment avenues. Government can consider special packages for self employment and employment intensive sectors like housing and real estate.
The salaried class suffered a lot due to the coronavirus pandemic last year. Do you think the government will come up with some tax relief this fiscal?
I don’t think govt can afford to provide any extra breaks to salaried class. Demands on public expenditure are large and government revenues are under acute stress. Salaried class has been relatively less impacted by the pandemic as compared to casual and unorganised sector workers. Government must provide relief to the latter category.
Since small and medium businesses were hit hard during the pandemic, what are the likely moves expected from the government in this budget?
Small and medium enterprises have suffered because of their limited capacity to withstand shocks. Economic growth revival and providing more liquidity to such units can help in their restoration to normalcy. Direct subsidy from the budget is neither feasible, affordable or desirable.
What can the government do to raise spending without affecting inflation?
In the current situation government can provide demand stimulation by relaxing the fiscal deficit reduction roadmap by 1 or 2%. But this may not be enough. Option of raising resources by more aggressive disinvestment and privatisation of PSUs should be considered. Also tapping global resources from sovereign funds and large pension funds should be facilitated. This can provide large funds for investment.
Hearing that the government may tweak customs duties on several goods. Do you see it on the cards?
Raising customs duty for protection is not a good idea. It can make Indian industry less competitive. But given the pandemic situation some protection for SME sector can be temporarily justified.
COVID-19 pandemic has emphasised the key role of healthcare in the lives of people, underlining the importance of higher budget allocation for improving the healthcare infrastructure in the country. Do you think the government's focus will be on a higher budget allocation for healthcare sector?
Investment in social infrastructure should be a priority for government. Some innovative ways of increasing investment in health and education sectors should be considered. It should be a joint effort between centre and states.