Finance Fundas -- Govt Budget or Casino ? : Reality Check

Nau Do Gyara

Perhaps roses really want to grow                 

and visions seriously intend to say;

time will not tell you anything

but I told you so.

– W. H. Auden.

Some statistics , I am afraid , but vital stuff . Please see the table below on the amounts of tax money for the last 6 years which the Govt of India has waived off.

(In Rs crores)

Year	Foregone Corporate Income Tax	Foregone Excise Duty	Foregone Custom Duty	Total Tax Foregone	Gross Tax Receipts of the Year
2005-06	34618	66760	127730	229108	370141
2006-07	50075	99690	123682	273447	467848
2007-08	62199	87468	153593	303260	585410
2008-09	66901	128293	225752	420946	627949
2009-10	72881	169121	195288	437290	633095
2010-11	88263	198291	174418	460972	786888

Source : GoI , Budget Papers ,various years.

This table is a very dense and opaque summary of unimaginably enormous sums of money changing hands in India every year by lawful action of Govt and approved by the Parliament in each years` Finance Bill. Let us try to decode some bits of it in plain language.

1. Please look at the last row. During the year about to end this March ( 2011 ) the Govt wrote off a sum of Rs. 88,263 crore of the income tax that was due from profit-making companies. Govt uses a cute word : foregone . It does not mean money lost because of exemptions and deductions given to approved savings, to senior citizen, women , etc. It also does not mean money uncaptured because of false “ Number 2 “ books of account – that is another loss altogether. It means income-tax assessed, calculated, and then kindly written off from dues , waived. Profitable corporates would have lost this money if it was not , as required by tax laws, foregone ! It amounts to Rs. 280 crore waived every day of the year in a poor country. Anybody mention the word “subsidy” here ?
2. Look at the scale. It is estimated that education of India`s children – granted as a right by law – is held back because the Govt can`t find Rs. 40,000 crore needed for it. All primary health centers of the country meant for the poor have become virtually extinct for want of about Rs. 25,000 crore. Debts of all small farmers of India, hundreds of whom are committing suicide every day, can be foregone with about Rs.30,000 crore. Some important bloke had said that India is a rich country of poor people. One can see why.
3. This is done not as a one-off. This is done every year. Last year this income-tax subsidy to the corporates was Rs. 72,881 crore. The year before that it was Rs. 66,901 crore. See the table. The rich honchos who look down at “free lunches” to the poor calmly pocket such gargantuan free dinners every year. Socialism, this ?
4. All this was only about income tax. Now look at the column of excise-duties – payable by the corporates on goods they manufacture on leaving their factory gates. Goods like matchboxes, soap,tea, medicines, etc. Customers of these goods pay this excise duty which is included in the goods` prices , and the corporates are required to pass on these sums to the Govt. in order to enable it for taking care of peoples` food, health, education. Shelter, safety, etc. Okay. During the current year ( 2011 ) Govt waived – forewent – recovery from the corporates of this excise duty totalling Rs. 1,98, 291 crore. Foregone , mind you, not lost because of crooked accounting of C-Forms – that is another loss altogether.
   Look at the amount. The entire 2G spectrum scam – subsidy to a few corporates , again ! – is estimated max at Rs. 1,90,000 crore. This much money already paid by the consuming public is given away to the corporates every year lawfully. Last year this amount was Rs. 1,69,121 crore. More in the table. Concern for aam aadmi ?
5. Next : custom duty. This is the tax payable on import of goods. In the current year the Govt wrote off custom duty of Rs. 1,74,418 crore. This is the money foregone , not evaded by smuggling, dockyard heists, crooked accounting, etc – that is another loss altogether. Who benefits ? No marks for guessing. Well, this year the importers of gold and diamonds – vital necessities of this poor nation yearning for some glitter – were allowed to keep to themselves Rs. 48,798 crore out of the Rs.1,74,418 crore ! Last year the figure was Rs.1,95,288 crore. Haji Mastaans, D – Companies deal in chicken feed.
6. Some great philosopher – Socrates, Buddha ? – said you can`t see something either because it is too small or it is too big.
   Please see the last column of the table. During the current year the Govt will collect gross taxes totalling Rs. 7,86,888 crore. At the same time it will forego Rs. 4,60,972 crore of taxes lawfully collectible from rich corporates – more than half ! And this happens every year for over 50 years ; this is above and beyond the political distractions of UPA, NDA, etc. 2G, CWGames, Adarsh, etc are peanuts.
7. Please note all this is from official Govt. data plainly given to all citizen in Budget Data on the official website of the Ministry of Finance ( within www.nic.in ) – not from some suspect cleverness of lefty intellectuals. All this is very boldly public , and in – your- face .
8. This is what is called “The System” – a vast and abiding interlocking web of the rich with the nizam of legislature/judiciary/executive for the purpose of impoverishing the nation lawfully. This is the foundation of what is called “corruption”.
9. Small wonder that this is not blazed as sensational expose' in newspapers and magazines . TV-anchors don`t have impassioned shows on this topic with eminent panellists. As Radia-gate has shown these too are a part of the system ; these are not watchdogs for the public. You have to read some obscure blog such as this to decipher such tables.