Why You Should Be Concerned About The Finance Bill '17
The BJP-led government that came to power in in Lok Sabha in 2014, did so on the back of a promise of development, a promise of change; a promise to move away from corruption and red tape and a promise to reform the economy.
Three years on, the government definitely seems to be on track in a lot of ways. The GST Bill, touted by many as a move that will have a vast long-term positive impact on the economy, is on its way to being implemented by the middle of this year. We are yet to hear of any big scam and infrastructure development has gained pace. The financial markets have also reacted positively, the recall of Rs 500 and Rs 1000 notes notwithstanding.
Things are good overall. However, some worrying events have transpired in very recent times. I am referencing the passage of the recent amendments to the Finance Bill. As many as forty amendments were passed and some of them are worrying.
None of us like the taxman. He takes away our hard-earned money in the form of income tax. While I am in no way suggesting anyone should evade taxes, it does feel bad to part with money you have earned, and it is only justified to be worried about them being arbitrary. Soon, an income-tax officer will be able to waltz into anyone's house or office to conduct a search or a seizure, and not even have to explain why- neither to you if you're being investigated nor the tax tribunal you would appeal to for help. Also, the government has even made this apply retrospectively- the taxman can, without explanation, investigate you or your company all the way back to 1962. This seems hypocritical since Finance Minister Arun Jaitley has insisted several times that he doesn't believe in retrospective taxation.
But the government is getting away with this. Why? Because the annual finance bill is what is called a "money bill"- unlike regular legislation, it doesn't need the approval of the upper house of India's parliament. It only needs the lower house to pass it, and there is literally no opposition to the BJP in the Lok Sabha.
The second thing that the Finance Bill has modified makes the government sound even more of a hypocrite.
First, it has scrapped a ceiling that earlier restricted a corporate entity from donating more than 7. 5 percent of its average net profit in the 3 immediately preceding fiscal years to a political party. This is still fine since one can argue that companies won’t have to do tricks to covertly donate cash to a political party to maintain a give-and-take relation.
But, the second provision gives a completely different turn to the story. In the Finance Bill, the government has proposed to cancel an existing rule that requires corporate entities to disclose, in the profit and loss account, the name of the political party to which the funding is made. The company only needs to make a mention of the amount contributed under this category. Soon, the Companies Act will be amended to make these amendments a law. Soon, the shareholders will not be able to know the who the company makes the donations to.
So while the government is nudging citizens towards an Aadhar-based cashless economy, the same transparency does not apply to political parties and companies. Yes, we are all in favour of a skilled, developed India that boasts a transparent economy, but not at the cost of innocent citizens facing tax raids without explanation and a lack of knowledge about the sources of funding of the very parties we elect to power.