NEW DELHI: Days after he demitted office following his transfer from Department of Economic Affairs (DEA) to low-profile Power Ministry, S.C. Garg has advocated scrapping of part-B of the Budget speech that contains tax proposals.
He has called for complete departure from the convention and suggested to do away with the practice of making specific announcements about rejig of rates in Budget speech.
“It is a tradition to announce tax-related measures and policy in the Part B of the Budget Speech of the Finance Minister. There is no need to announce specific tax measures in the Budget Speech,” Garg has written in a 72-page policy prescription for India to become $10 trillion by 2030.
Garg was instrumental in preparing two full budgets and one interim one before he was moved to Power Ministry, considered a demotion for the senior IAS officer.
Proposing to completely discontinue part B of the Budget speech, Garg has said that there is very little in terms of indirect tax measures to be announced at the budget presentation time after the roll-out of new indirect tax regime as all issues related to GST are now decided by GST Council.
He further noted that the tax policies affect growth, investment, structural shifts in the economy and also consumption in the economy.
“In this manner, tax policy measures need to be woven into the entire budget speech integrating it with other policy measures considered for affecting these economic variables and behaviour,” he said.
Garg stressed the predictability of taxation system and hence the rates and incidence structure should not be tempered with.
Noting that this year’s budget speech had very little of numbers, Garg said that the Budget speech should evolve into a policy making speech event only.
“The Budget speech should clearly outline Government’s Expenditure Policy, Tax Policy, Macro-economic Management policy and also major structural reforms which the Government intends to initiate in the short, medium and long term,” the former DEA Secretary said.
The Budget speech given by Finance Minister Nirmala Sitharaman had come under attack from main opposition Congress Party. Garg was one of the key architects of the Budget presented by Sitharaman.
“Has there ever been a Budget speech that does not disclose the total revenue, the total expenditure, the fiscal deficit, the revenue deficit, the additional revenue mobilisation or the financial concessions?” former Finance Minister and senior Congress leader P Chidambaram had said reacting to the Budget speech.