Stick to a vote on account on feb 1

Stick to a vote on account on feb 1

Some traditions are best left undisturbed.

The government is to present its interim Budget, ahead of the 2019 general elections to elect the 17th Lok Sabha, on February 1. It should stick to convention and present no direct tax changes in the Budget. Of course, the government can alter indirect taxes outside the Budget, via notification. Now, such changes would apply to customs duties, as GST subsumes other indirect taxes. And the GST Council decides on GST rates. Of course, the government would be perfectly within its right to lay out its vision for the economy and even its vision for revenues, as Jaswant Singh had, in his speech while presenting the last Budget of the Vajpayee-led NDA government prior to the general elections of 2004.

The Budget lays out the government’s receipts and expenditure for the next fiscal year. Of that next fiscal year, it is only for the first six weeks that the present, 16th, Lok Sabha would exist. It is the prerogative of the 17th Lok Sabha to preside over the fortunes of the government for the remaining 46 weeks, or 88% of the next fiscal. It is only appropriate for the present Lok Sabha to leave it to its successor to adopt the Budget for 2019-20. That means what the acting finance minister Piyush Goyal should present to Parliament on February 1 is a simple vote on account, accompanied, if he wishes, with the vision of his government for the Indian economy in a slowing world.

Yet, technically speaking, there is another window for the government to alter direct taxes: by adopting a new Direct Taxes Code (DTC), outside the Budget, which normally proposes amendments to the Income-Tax Act as it stands. Till the elections are notified, the government would be within its rights to bring in legislation of the kind it deems fit. And a new DTC would be a fresh piece of legislation. However, this would be a technical judgement. It would be in keeping with the finer traditions of parliamentary democracy for the government to abjure last-minute changes to taxation that will have effect for much, much longer than the remaining life of the present Lok Sabha.