WORKSHOP ON UNION BUDGET – 2008
5TH MARCH, 2008
ICAI STANDS FOR ACCOUNTABILITY IN PUBLIC SPENDING |
| The Direct Taxes Committee and the Indirect Taxes Committee of ICAI organized a Workshop on Union Budget – 2008-09 which was addressed by Dr. S. Gangopadhyay, Advisor to the Union Finance Minister, Government of India and Shri R. Sekar, Joint Secretary (TRU), Central Board of Excise and Customs. |
| In his welcome speech CA. Ved Jain, President, ICAI observed that the Institute annually submits Pre-Budget and Post Budget Memorandum to the Government. He was happy to note that many of the suggestions were accepted by the Government and incorporated in the respective Finance Acts. Recently the ICAI had constituted important committees like Public Finance Committee, Government Accounting Committee and Management Accounting Committee. The Public Finance Committee would analyse Government’s budgetary expenditure, welfare schemes and end use of funds. As a social responsibility, the ICAI would assist the Central and State Governments to implement the economic policies with transparent financial disclosure. The responsibility and accountability would improve the quality of deployment of public money. The ICAI has already been assisting various Government department including local authorities for converting from single entry to double entry accounting. The ICAI believes that good governance in the public institutions is a hallmark for socio economic reform in the country. |
| CA. Bhavna G. Doshi, Chairperson, Indirect Taxes Committee and CA. Mahesh P. Sarda, Chairman, Direct Taxes Committee guided the deliberations of the Workshop.
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| Dr. S. Gangopadhyay, Advisor to the Union Finance Minister, Government of India, while addressing the ICAI Workshop on Union Budget – 2008 explained the rationale behind the budget making process. Dr. Gangopadhyay said that the tax slabs have been rationalised to maintain the buoyancy in the economy. He observed that market forces should determine the extent of economic activities and the Government had placed the onus of development on the market based economy. The slowdown in the growth rate in the international plane is affecting the Indian economy but as a matured economy India should be able to raise its own resources. In that context, the Government has placed adequate emphasis on the farm growth by making a number of allocations and addressing the critical issues faced by the farmers. It was imperative for the Government to boost the demand and consumption in the economy and the private sector had to play an important role in achieving this goal. Further, the fiscal deficit adequately addresses the issue of the Sixth Pay Commission, considering the fact that a sizeable chunk of the increase would flow back to the government in the form of taxes.
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| The Advisor stressed the importance of development of skills particularly in the lower sectors of the economy which would enable adequate supply of skilled manpower for over-all development. The Government had taken the initiatives in this regard through the Skill Development Mission and its success of training people at the grass root level would depend upon the way in which the market and the private sector respond to the initiatives of the Government. |
| Dwelling upon the issue of farm loans, he said that increased consumption would not per se result in agricultural development and hence direct intervention of the Government was necessary. It was the duty of the Government to address the issue of small and marginal farmers. The extent of wavier takes into account all the relevant factors. |
| Dr. S Gangopadhyay, appreciated the initiatives of the ICAI in forming independent committees to advise on the financial performance of the State Governments. He pointed out that the State Governments were the destination points for a large amount of finance involved in a number of centrally sponsored programmes. Such an independent monitoring would reveal the bottlenecks in the various stages. He reciprocated positively to the Institute’s proposal to make available the services of its members for introduction of double entry system of accounting at the various levels of the Government and also for properly accounting for capital asset creation all over the country. He further stressed the importance of providing education to larger sections of the society. |
| On the issue of the impact of expenditure driven growth on inflation, he observed that inflation was a major issue and it was the collective responsibility of the Central and the State Governments to control the inflation. He further said that inflation would be closely monitored. The Government was moving more and more towards the automation system whereby the intervention of the discretionary element would be considerably reduced thereby contributing to better transparency in the tax and economic administration. On the issue of penalty, he said that it was a cost to induce tax payers to pay his taxes in time. |
| CA. Uttam Prakash Agarwal, Vice-President, ICAI and other Council Members of ICAI interacted with the Advisor |
| It was pointed out by CA. Subodh Aggarwal, Council member of ICAI that the Public Finance Committee constituted in the current year would look into various aspects of public finance both at the Central as well as the State Level. He also observed that the Committee would be looking into efficient utilisation of public spending so as to find out where the problem lay in making the benefit reach the desired destination. |
| CA. Vinod Jain, Council Member, ICAI stated that Government should now opt for double entry accounting system so as to have better presentation of its financial affairs. He offered the assistance of the ICAI in transformation of the single entry into double entry accounting system. |
| CA. Rajkumar Adukia, Council member, ICAI pointed out that the Government Officials should be made more accountable. He further pointed out that certain amendments proposed in the Finance Bill, 2008 put premium on efficiency. |
| CA. G. Ramaswamy, Council member, ICAI pointed out that as a result of export of cotton, the textile industry in south was facing a crisis and also that the rupee appreciation might be appropriately factored while addressing this crisis. |
| CA. J. Venkateswarlu observed that the scope of assistance to farmers might be appropriately enlarged. |
| CA. Bhavna G. Doshi, Chairperson, Indirect Taxes Committee proposed a vote of thanks. |
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