ALL give and no take? Taxes and duties cut across the board, all prices except for those of cigarettes and postal stationery unchanged or set to fall, yet at the end of next year lower revenue and fiscal deficits, even a small primary surplus?
With euphoria running high currently, it would be interesting, though politically incorrect, to probe where the money for so many giveaways is coming from.
The success of Budget 97 as a growth instrument hinges on the receipts side. One, revenue receipts, mostly tax revenues, which are expected to jump 17 per cent. It's clear the finance minister expects revenue buoyancy to continue on the belief that lower taxes induce compliance.
The second factor is capital receipts—expected to provide 22 per cent more next year, thanks equally to Rs 4,800 crore of disinvestment and extra borrowings. The total receipts are expected to fund an expenditure higher by close to 15 per cent at Rs 232,196 crore. This exactly matches the receipts, so the numbers do add up to a lower revenue deficit.
There is a small financial catch here. From the...