Tomorrow is the much awaited budget.

The secrecy: The Finance Minister Chidambaram himself believes that budget as a concept and the associated secrecy will not last long but as of now it is a very secret exercise. Why should it be so? After all the Income tax proposals are to be effective only from the next financial year! Is it because the customs and excise increase or imposition is immediately effective? Now a days there is hardly any increase or imposition But still the secrecy remains – may be more of a tradition than need. Try to peep into North Block – you really can’t. High-tech tapping devices, an army of security personnel, sophisticated surveillance gadgetry, digital deterrents, electronic sweeping devices and jammers, huge scanners – well the budget is under the tightest possible security.  

No phones, no mails, no SMS and every communication with the outside world is blocked for the officers preparing the budget. The IB is in total control. Nothing can come out of North Block without the IB’s knowledge. Heading the whole operation is Dr. Adarsh Kishore, the Finance Secretary who is in constant touch with the Financer Minister and the Prime Minister. There used to be a tradition that the Finance Secretary’s wife should not go shopping during budget time for the price of anything she bought was sure to go up. The Finance Secretary and his staff hardly have any sleep for over a fortnight to bring out that budget.

But obviously the heavy task of the budget is light for the FM Chidambaram. He is all over the place exuberating confidence. The FM’s Private Secretary is S. Krishnan, son in law of former Finance Secretary, K P Geethakrishnan. With Adarsh and Krishnan in control, obviously Chidambaram can relax.  

The dramatis personae in the Budget 2006.  

And of course a host of other officers committed to the Budget mission. And every one doing the budget is under constant IB surveillance that they don’t dare to talk to even their spouses.

The budget papers are printed in the cellar of the North Block and now with the computer revolution, CDs of the budget are made available. Incidentally even the DG, Systems which runs the web site of the CBEC has no access to the CD before any one else. But NIC gets it a little before the actual reading of the budget. It is really unfortunate that the departmental web site does not get the budget in advance and they will have to get it like any body else.

The Budget consists of the following and in that order.

Key to Budget

Budget Highlights

Budget Speech

Budget at a Glance

Annual Financial Statement Finance Bill

Memorandum

Receipt Budget

Expenditure Budget

Customs & Central Excise

Implementation of Budget Announcements

The Macro Economic Framework Statement

The Medium Term Fiscal Policy Statement

The Fiscal Policy

Strategy Statement

The Statement under Section 7 of the FRBM Act

Budget snippets

Mr. Yaswant Sinha was told by an opposition leader once that he was the second worst finance minister he had known. Mr.  Sinha asked, ‘‘and who was the worst?’’ ‘‘you only during your first tenure’’, was the prompt reply

· Peter the great of Russia even made people to pay for sporting beards.

· A Turkish ruler required his hosts to shell out ‘tooth money’ for the wear and tear their meal put on his teeth

· Roman emperor Vespasian had placed a tax on public urinals. When his son Titus insisted that it was an undignified act. Vespasian took a handful of coins obtained from this source and held them to his son’s nose saying: ‘‘see my boy, if they smell?’’

· Michael Faraday once happened to explain his discovery of electro-magnetism to William Gladstone. The prime minister just shrugged it off exclaiming: ‘‘of what use is such a discovery?’’ ‘‘why, you will soon be able to tax it’’, Faraday shot back

· There were no lawyers in the highest class while the next higher class included 58 ministers of religion, 17 legal practitioners and no medical men. I wonder whether religion was more lucrative than law. ( a report in 1870)

· “There comes perhaps a time in the life of every smoker when the concern for his own health begins to outweigh the loyalty to an old and faithful companion. For those who cannot shake off their consuming passion, there is at least the consolation that the more taxes they pay, the more they serve the common cause. I am, therefore, fortified in my decision to increase once again the taxation on cigarettes by the thought that whichever way my smoking friends react, there would be a net gain to national welfare.” – YB Chavan

· “In a situation where both the husband and the wife are tax-payers in their own right, it would be improper for any outsider to decide as to who is dependent on whom. At present, we avoid this ticklish question by allowing both parties to claim a spouse allowance. This still leaves open the question as to who brings more tax benefit to the partnership through marriage. To eliminate this unintended strain on the relationship of marriage, I propose to provide that where both the husband and the wife have taxable incomes, the spouse allowance will be available to neither.” – Morarjee Desai

· “Housewives in India, as elsewhere, have been complaining for some time about the rise in their expenses. As a measure of economising on their fuel bills without affecting the nutritional and, hopefully, the gastronomic value of what they cook, I propose to exempt totally pressure cookers from excise duties. They would now find someone else in their kitchens letting off steam.” – Pranab Mukherjee

· Voting the Congress  is not only good politics but also good economics- Dr. Man Mohan Singh

Exchange rates announced for imported goods and export goods

Notification Nos. 16 and 17/2006-Cus. (N.T.), dated 23-02-2006 fix the exchange rates for imports and exports respectively with effect from 1^st March, 2006. Notifications 05 and 06/2006-Cus. (N.T.), dated 25-01-2006 are superseded.

Greek and Latin - DDT's new feature

obiter dictum– (oh-bee-ter deek-toom)

Something a judge says in arguing a point, but has no bearing on the final decision

“Obiter dictum is a judge’s expression of opinion uttered in discussing a point of law or in giving judgments, but not essential to the decision and so without binding authority, generally, an incidental remark.” – S.B. Sarkar’s “Words and Phrases of Excise Customs & Service Tax

In A.K. Roy and another v. Voltas Ltd., popularly known as the Voltas case in Excise circles, Justice K.K. Mathew made an obiter dictum that “Excise is a tax on the production and manufacture of goods”.

“Obiter dictum is an opinion on some point which is not necessary for the decision of the case. The emphasis is not only on the opinion, but also on the point. It is not merely an expression of opinion unconnected with the point that arises, but it must be an opinion given on a point which arises for determination. It would be incorrect to say that every opinion of the Supreme Court would be binding upon the High Courts in India. The only opinion which would be binding would be an opinion expressed on a question that arose for the determination of the Supreme Court, and when though ultimately it might be found that the particular question was not necessary for the decision of the case, even so, if an opinion was expressed by the Supreme Court on that question, then the opinion would be binding upon High Courts. In the case of Maqbool Hussain v. State of Bombay, it is clear that no question ever arose before the Supreme Court, or could possibly arise, with regard to the interpretation of Section 167(8). The only order under Section 167(8) was an order of confiscation, and in deciding whether article 20(2) applied or not the question as to the power of the Customs authorities to impose the penalty under Section 167(8) was entirely irrelevant. Therefore, the observation of the Supreme Court that the penalty under Section 167(8) is limited to Rs. 1,000/- is not an obiter dictum in the sense indicated. It was not an expression of opinion on a point that arose before the Supreme Court. It is a casual observation made in considering the whole scheme of the Sea Customs Act” – Bombay High Court

“Milk is not obtained by drying up the cow; similarly from the country, fruits are obtained by proper tapping and not by harassment.” --Chanakya

Until tomorrow with more DDT and the budget

Have a nice day.

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