The Hon'ble Finance Minister Shri Jashwant Singh presented budget 2003-2004 in Lok-Sabha. It was announced that only administrative changes will be made during the year and recommendations made by Kelkar Committee on direct taxes were not implemented. The Standard Deduction from salary, deductions and rebates were not deleted and contrary to report three major reliefs were given with regard to Standard Deduction on salary increasing rate of deduction and allowing standard deduction in case of assessee, (i) Whose income is about 5 lacs. (ii) Relief under section 80L, interest income is increased. (iii) Without any reason or ground, tax rebate under section 88B of I. T. Act to senior citizen is increased from Rs.15,000 to Rs.20,000.

The Hon'ble Finance Minister has estimated in budget of 2003-2004, Revnue Receipts of Rs.2,35,935 crores, plan expenditure at Rs.1,20,974 crores, non plan expenditure at Rs.3,17,821 crores and fiscal deficit at Rs.1,53,637 crores, which is 5.6% of the estimated G.D.P.

The Hon'ble Minister has not sufficiently provided in the budget for annual increase of Dearness-Allowance of about Rs.1,700 crores, loss of short fall to L.I.C. for giving 9% assured interest to senior citizens investment plan, income of 2% of loss to States, in recovery of Central States tax as it is reduced from 4% to 2%, health insurance subsidy and loss of income to Centre as States are allowed to exchange high interest securities against low interest securities.

The fiscal Deficit is likely to be 6.0% in March, 2004 instead of 5.6% estimated of G.D.P. in the budget, and all estimates are likely to be wrong in March, 2004. It is unfortunate that in spite of above facts of budget, it is applauded by the industrialists, experts and press.

COMMENTS ON BUDGET :

One of the editorials has remarked in his editorial on the Budget as under :

"On oil subsidies, the accounting remains as confusing as ever. Last year, the budget had provided Rs.6,500 crores to meet the subsidy on LPG and Kerosene. But this shot upto about Rs.9,000 crores. In fiscal 2003-2004 Rs.8,500 crores has been provided with the promise that any international price increase will be borne by the consumer or the oil companies. Finance Minister Jashwant Singh has asserted this with as much conviction as Yashwant Sinha did last year. We all know that will happen if international prices shoot up dramatically. Even on the revenue side, the numbers are not reliable. In 2002-2003, the budget provided a 22% increase in revenues over the revised estimates. But actual collections fell so short of the revised estimates that the target for revenue collection became 30%. Needless to say there has been a big shortfall this fiscal. How can revenues grow at 30% when the industry is projected to grow at 6 to 7% in real terms? The sancity of the entire budget exercise gets violated when actual revenues and expenditures show such huge departures from the budget estimates. It makes much more sense to make realistic assumptions, than indulge in self-delusive accounting."

MOODYS INVESTOR SERVICE :

"India would find it tough to meet its fiscal deficit target for 2003-2004, given its plans to cut taxes and step up spending on infrastructure, Moody's Investors service said.

"We consider the likelihood of meeting the deficit targets quite remote, "Kristin Lindow, a New York-based India analyst at rating agency, said in reply to questions from Reuters on the Budget.

"The Government can ill-afford to be so generous in light of its already large and growing debt burden."

STANDARD AND POORS (S & P) RATING :

"Global rating agency Standard and Poor's (S&P) felt that the Budget has done anything significant to bring down the fiscal deficit to usher in fiscal consolidation.

Takahira Ogawa, Director & Team Leader, Asia & Pacific Sovereign Ratings, Standard & Poor's, said : "There is nothing significant in the Budget to change our view." S&P sometime back re-affirmed India's BB foreign currency long-term sovereign credit ratings as well as as its B short-term credit ratings. The outlook is negative.

"India's rating remain constrained by high public debt and serious fiscal inflexibility," Ogawa had said at that time.