The budget is a document comprising of varied hopes and aspirations of different sections of the society. The purpose of the budget is to announce government finances, and its future allocation to further key government welfare programmes. The first Union Finance Minister of Independent India, R K Shanmugan Shetty presented the first Union Budget which many marked as pro-poor. The country freed from the shackles of the colonial rule aimed in allocating resources in building a prosperous nation.
The framers of the Indian Constitution have managed to state the mechanism by which a Union Budget is to be introduced. Article 112 of the Constitution of India states the procedure in which the Budget is introduced as a Money Bill by the Union Finance Minister, and then after getting passed, it is presented by the Union Finance Minister. Under the Modi regime, many financial gurus and citizens hoped for a positive policy reformation and some lucrative announcements which would serve the public good. The Union Finance Minister, Arun Jaitley, indicated many positive hopes such as revival of the economy to the upward trend. But, the Union Budget 2016-17 also contained several controversial announcements, causing a furore amongst the legislators and citizens. The Finance Minister came under scathing criticism for proposing 60% tax on withdrawals on Employee Provident Fund. This announcement led to a sharp criticism from the opposition, trade unions, media and various other segments of the society.
The dissidents propounded that such policy is likely to attract double taxation. Mr. A. K. Padmanabhan, President of the Centre Trade Union, contended that the proposal is likely to make EPF less attractive than the National Pension Scheme. The purpose of the tax proposal is to encourage people to invest more towards the National Pension Scheme. The proposal not only attracted criticism from outside, but also within the Sangh affiliated trade unions. The common voice for this criticism was to avoid double taxation which would be discriminatory towards the working class, and the general contention was that EPF remains the most popular mode of saving for the working class. Thus, such an arbitrary proposal was likely to reduce the returns on the EPF.
The democratic institution, which has been under a constant apprehension, was retained as the proposal to tax on the withdrawal of the EPF was scrapped. The decision to scrap the proposal was taken after several deliberations and upholding the concerns of the united opposition. This has been a victory to the democratic principle where dissents are also given its due importance.