Medieval Indian folk tales remind us about the impact of the good governance process called tax collection. The king’s soldiers should be as silent as a bee collecting honey from the flower and should not disturb or even hurt the public: that was the ancient India’s governance message. Today the silent impact of indirect taxes, high prices and microfinance loans together leads farmers and consumers towards suicides. The nation has to carry forward the choiceless baggage of lakhs of farmers’ suicides. It is a matter of common sense that due to an unpredictable market it is difficult for a farmer in comparison to a city entrepreneur to pay back his loan without market support for his capacity. Recently, TV channels showed that a city labour’s hand was chopped off as he was unable to pay a loan of Rs.300 to the lender. In ancient days, a loan seeker used to avail the opportunity of advance money called loan by producing more wealth in a period of time and then used to return the loan safely. Today the government takes loan with a business sense to utilise this money of people saving in making more money faster than the interest amount. It is a well accepted norm to talk of fiscal deficit as the gap between the income and future expenses of the country is kept wide open. The fiscal deficit, as pointed by few MPs, in this year’s budget has been shown at about Rs. 5,22,000 crore while the tax revenues waved off or gifted as concession stands around a whopping Rs 5,30,000 crore. It appears even the government is forced to take loan without daring to say no to the corporate concessions gifted as incentives. Figures shown there could have been a loan free surplus of Rs.800 crore if taxes were to be collected honestly.

Strangely ignoring the familiar Indian references to Kautilya's Arthashastra, the finance minister, in his budget speech, quoted from Shakespeare's Hamlet."I must be cruel only to be kind". This quote from European culture is perhaps picked up by FM to motivate the majority in India, to prepare middle class and poor for more sacrifices. Market survival is simple. One shinning, the other suffering. It can never deliver the win-win for all. When someone is spending, someone else is gaining. In modern India with indirect `hidden’ taxes we find a new way to guide India’s economy tax collection. Since a majority has a hand-to-mouth income the possibility to use direct income tax to squeeze them does not arise. Indirect taxes carefully packed in each and every industrial and agriculture produce help the lawmakers to hide behind the retailer and producer of goods and services. Direct tax collection is unpopular as four crore privileged taxpayers in 120 crore strong largest democracy are expected to use concessions to generate more production and improve the GNP. Here the trick is that the corporate rich are interested in giving a false bubble growth by not investing in real production but by pumping money in stock markets ensuring jobless growth. The government continues to give concessions to direct taxes and justify favouring the rich at the cost of the poor. 69 billionaires have an asset value equivalent to one-third of our GDP, while out of the rest of the 12o crore Indians, over 80 crore struggle to survive on less than Rs 22 a day!

In the past the tax system was simple. Direct taxes at the rate of around 6% in shape of crop was deposited in the temple warehouses. Indirect taxes hidden in the cost of goods as seen today in the industrial/agriculture output was missing. If the taxpayers in ancient times resisted they were expected to stop the king’s horse, a part of revenue generation politics packed with religious label in a ritual called Ashvamegha Yagya. If the rain gods were kind enough then the recovery of the tax was cent percent. In a governance system which survives on city-slum, town-village and Bharat-India divide, let us see the impact of budget 2012-13.

A majority fails to understand the difference of ten times in the direct-indirect taxes direction and recovery. While direct tax collection is pegged at Rs 4,500 crore, indirect taxes would raise Rs 45,940 crore in the current year budget. You need not be a student of economics to see that indirect taxes are a huge burden on people, while the low direct tax rates were a relief for the rich. The common man calculates the risk in survival with his decreasing hard work value vis-à-vis his standard of living. In India when the price rises every month it hurts 99% as the money in the pocket as earnings do not match and remain freezed. With no sale of goods in the market, no wage security, no job security and no social security the market recession stands teasing.

Terms like fiscal deficit and subsidy used by policymakers to calibrate and audit the budget do not make sense to the majority people who are engaged day and night in earning a living. The helpless government is trying to hide the dirty poverty picture. It makes false claims of decreasing poverty by lowering the below poverty line limit. What the policymakers forget is that the financial crisis can only be saved by raising the standard of living. Better purchasing power of the people as market crisis ‘savers’ is the only way out.

Policies in past were made as complimentary to environment and ecology. No feudal king in the past had ever dared to sell forest, ordinary well/stream water or river water including our holy Ganga. Silence of ancient tax collection is compared with the sun silently converting the water to vapour but the rain clouds with thunder and rain supporting greenery must show that the money taken as tax is put back to the public welfare in the cycle controlled by the rich-poor divide with the real producers reduced to beggars. Today the discussion is how and why to reduce the fertilizer and diesel subsidy. Much energy is invested to redefine the BPL India to save the politicians from the shame. The government considers concessions for the rich as an incentive for growth while subsidies for the poor is seen as being negative for growth as it hardly reaches the needs and the system of distribution has many leakages. The petroleum pricing policy is also skewed. The government calculates the prices of petroleum products on the basis of international prices of crude oil. But the fact is imported crude is refined in India and pricing should be based on domestic component inputs.

Why Pranab Da chose to include Hamlet reference in his budget presentation? A tempest in every home: Pranab plays it safe by putting more emphasis on euro crisis and more salary cuts and pensions in Europe. In subsequent media interviews the FM was quick to score by saying we are still better then Europe. Hamlet, the prince of Denmark, The Tempest ... In his first soliloquy, Hamlet explains that he does not like his mother marrying the next king of Denmark so quickly within a month. It is unfortunate that the helpless finance minister is committed like in marriage to protect the interests of the few rich corporate and shift the blame to compulsory collaborations of the government with allies. Opposition and the Left were bitter in the budget critique by demanding, ”Why rob the poor to pay more to rich?” 14 Lakh of industrial and agriculture workers and TUs which went on strike gave the FM their suggestions which were not mentioned in the budget layout. Budget fails to see that fall in wages of workers both organised and unorganized engaged in production investments which means less purchasing power in the pockets of millions.

The PM says the finance minister had to bite the bullet, but it seems he has bought the used empty bullets and is unable to learn from the Euro crisis.