(Centre-State meeting on States' fiscal situation Sept 2002.Image Courtesy: PIB)

 

“If Parliament does not make a law, it is certainly the fault of Parliament and I should have thought it very difficult to imagine any future Parliament which will not pay sufficient or serious attention to this matter and enact a law. Under the article 268 (renumbered Article 292 in the finalized Constitution), I even concede that there might be an Annual Debt Act made by Parliament prescribing or limiting the power of the executive as to how much they can borrow within that year. ”

Dr. B. R. Ambedkar’s apprehension about Parliament’s failure has turned out to be true to the horror of voiceless future generations being burdened by borrowings resorted to be successive short-sighted regimes. 

No doubt, Parliament belatedly enacted Fiscal Responsibility and Budget Management Act 2003 (FRBMA). This law is not what is envisaged by Article 292. FRBMA is a toothless wonder that provides no penalty for its violation. The Executive’s actions under this law can’t be challenged in courts. 

FRBMA is thus a far cry from what Dr. Ambedkar desired on 10th August 1949. It is poles apart from what certain members of Constituent Assembly unsuccessfully demanded for tightening the Article relating to government borrowings. 

 (Sniffer Dog checking Budget Documents-Image Courtesy: PIB)

 

 

“Prime Minister Narendra Modi on Monday asked his Cabinet colleagues to treat the BJP's poll manifesto as a sacred document like the Bhagvad Gita and read it every day to assess the amount of work they have done so far to fulfil the promises.” So went a news story in Times of India dated 22 October 2014. 

The God know whether Finance Minister Arun Jaitley reads the BJP's Lok Sabha Manifesto (LSM) daily. In all probability, he either did not read LSM before crafting his ‘Transform India’ budget for 2016-17 or chose discretion over political dharma.

Had he read LSM time and gain, had he read BJP’s previous LS manifestos, had he read NDA-I’s unfulfilled promises, he would not have designed his “transformative agenda with nine distinct pillars.” He would have used more pillars- may be increased their number to a dozen if not two dozen. LSP is full of growth pillars. Mr. Jaitley would hopefully locate more pillars to give wholesomeness to transform agenda in the budget for 2017-18.     

A durable and elegant house should, however, always be erected on even number of pillars. The #OddEven virus of his bête noire Arvind Kejriwal perhaps entered Mr. Jaitley’s laptop and left the budget short of one pillar! 

Striking a serious chord, one can say that Mr. Jaitley should have added 10th pillar to 'Transform Agenda’. And this crucial pillar is: Providing safety to citizens including investors. The crying need of the hour is to restore citizens’ faith and fear in illusive rule of the law.

 (Edited Image Courtesy: climateinvestmentfunds.org)

 

With the Climate Change eclipsing all other global risk factors, its management through taxation, expenditure reforms and innovative projects finance has opened a new fiscal avenue for all the nations. And this avenue, paved with both challenges and opportunities, would become byzantine in the coming years.

The course of avenue would become clear after the Paris Climate Conference where 195 countries are set to agree on tough targets for greenhouse gases (GHGs) reductions under the UN Framework Convention on Climate Change (UNFCCC).

It would be for the first time that nations would strive to achieve a legally binding and universal agreement on climate to limit global warming below 2°C.

This 21st annual Conference of Parties (COP21) on the UNFCCC, beginning 30th November 2015, would thus leave an indelible mark on climate change-centric fiscal domain. It has grown from a diffused pollution control imposts to a web of fiscal instruments, expenditure management tools and investment options since May 1992 when UNFCCC was adopted at Rio Earth Summit in Brazil.

International Chamber of Commerce believes that all countries will benefit from a climate agreement that facilitates worldwide adoption of environmentally sound technologies and climate-friendly solutions that contribute to sustainable development.

Time has thus come for finance ministries to make climate change management (CCM) a major, integrated objective of annual budget. It should encompass tax and non-tax revenue, capital and recurring expenditure and fiscal deficit.