budget

Updated: Jul 07, 2019 09:49 IST

The two budget speeches, delivered nearly half-a-century apart, make for a study in both similarities and contrasts. The first was by Indira Gandhi, who held the finance portfolio for about a year when she was prime minister and presented the 1970-71 budget. The second was by Nirmala Sitharaman who unveiled the 2019-20 fiscal; package as India’s first full woman finance minister.

The two budgets also illustrate how far the economy has come from the 1970s, when India was in a semi-socialist cocoon, insulated from the rest of the world by self-imposed, Communist-style economic controls.

Gandhi’s speech chided smokers for their “devotion to smoking” and proposed to increase tax on tobacco products, made several self-deprecating digs including her own personal preference for preserved foods such as butter and cheese and proposed to curb consumption on liquor “as a modest gesture of personal, if not political reconciliation.” Gandhi proposed to increase the duty on whisky, brandy, gin and wines.

In the 1970s, smoking wasn’t looked down as a vice, social evil or health hazard as it is now and smokers were generally treated with good-humoured tolerance by those who didn’t smoke.

“I am sorry that the smokers’ pocket has to be touched once again,” Gandhi said, raising duty on cigarettes by 3% to 22% ad valorem depending on the value slabs.

The price of cheaper varieties of cigarettes would go up by one or two paise per packet of 10 cigarettes.

“Assuming that the smoking community remains steadfast in its devotion, the additional revenue from this measure will be Rs 13. 50 crores,” Gandhi had remarked in her speech.

Sitharaman’s budget imposed excise duty of Rs 5 per 1,000 cigarette sticks up to 75 mm in length and on premium king size cigarettes by Rs 10 per 1,0000 sticks. Sitharaman in her speech said tobacco products “attract national calamity and contingent duty”.

Gandhi had also levied higher taxes on preserved food. She mentioned that a 10% ad valorem duty was levied the previous year on prepared and preserved foods and included canned fruits, jams, jellies, fruit juices, squashes and certain meat products she added that she wanted to remove the “bias against fruits and meat” by extending the levy to include other preserved food including vegetable juices, instant coffee, instant - tea, jelly crystals, custard and ice-cream powders, biscuits, drinking chocolate etc,.

“I hope honourable members will not accuse me of having preferences of my own as. even under my proposals. aerated waters, biscuits, butter and cheese will be taxed only when manufactured with the aid of power and there will be total exemption from tax for baby foods and branded ‘deshi’ ghee,” she had said. These proposals were proposed to garner additional revenue of Rs 8.68 crore.

While Sitharaman’s budget proposed a hike of one rupee each on special additional excise duty and road and infrastructure cess leading to a Rs 2 per litre increase in petrol and diesel prices, Gandhi proposed a hike in petrol and kerosene rates.

“The demand for petroleum products has been increasing very rapidly and it is necessary to exercise some restraint in the interest of saving valuable foreign exchange. It is also necessary to curtail the adulteration of diesel oil by kerosene, which has assumed substantial proportions, and to discourage the use of furnace oil as a substitute for other fuels such as coal. Accordingly, the duty on motor spirit is proposed to be increased by 10 paise per litre, on superior kerosene by 2 paise per litre and on furnace oil by 2 paise per litre,” she had said.

For this, Gandhi faced opposition in the Rajya Sabha when an opposition leader accused her of increasing Diesel prices adding that there was “nothing new” in her union budget. In her reply, Gandhi had agreed that the budget “could have been better and bolder”.

According to government archives which have now been made public by the Press Information Bureau (PIB), Gandhi in her Rajya Sabha debate on the budget said, “Mr Deputy Chairman Sir, the first speaker of opposition said that there was nothing new in the budget, but the young doctor, I think was from the Jan Sangh, Dr Bhai Mahavir, was pleased to describe it as the most significant budget since 1947. I myself do not make such resounding claim for the budget and I believe that had circumstances permitted , the budget could have been better and bolder,” she said, adding that there was not much new.

“The poverty of the country is not new Our desire to fight poverty is not new, but in every earnest Budget something dynamic must be done to fight against these old familiar problems,” she had said.

The Bharatiya Jana Sangh that existed from 1951 to 1977 was a political offshoot of the Rashtriya Swayamsevak Sangh.

“In the last twenty years we have taken up several challenges. Planning itself has been the acceptance of a mighty challenge. As my father once said, the timid of the heart could never build a Bhakra Dam or the other steel plants. It is because we accepted the challenge of development and built the infrastructure that we are today at the stage of building the main structure and addressing ourselves to the reduction of inequalities and disparities,” Gandhi had said in Rajya Sabha.