134. Our excise procedures are outdated and not in tune with the times. They need to be modified. They should encourage voluntary compliance with tax laws by the tax payers. With effect from 1st October,1996, assessees would no longer be required to furnish copies of invoices along with the monthly returns. All that they would be required to furnish to the excise department will be a simple Return indicating the duty paid on self- assessment basis. Wherever possible the assessees' computers could also be linked to the Department's computers for on line assessment.

135. I also propose to introduce a scheme of selective audit by the excise officers and dispense with the existing scheme of routine examination and checking of returns and documents furnished by the assessees. This scheme would also come into force from 1st October, 1996.

136. I am sure that these changes would be widely welcomed by the manufacturers who are required to pay excise duties and I expect them to comply with the laws faithfully. However, I wish to affirm government's resolve to deal with tax evaders sternly. I am proposing suitable changes in the Customs and Excise Acts to provide for mandatory penalty, together with interest, for evasion of duties on account of fraud, collusion, mis-statement or suppression of facts. Henceforth, the mandatory penalty for evasion of duty on these counts shall be equal to the amount of duty evaded. Tax evaders would also be required to pay interest starting from the first day of the succeeding month in which the duty evaded ought to have been paid and also face criminal prosecution.

137. Mr. Speaker, Sir, the Central Excise and Salt Act, 1944, reminds us of the colonial era when excise duty was collected on salt. There is no excise duty on salt and hence the reference to salt is outdated. I propose to delete all references to salt.

138. The Modvat scheme which provides for duty credit on inputs and capital goods has been liberalised considerably over the past few years. Still, there are problems about the coverage of certain inputs and capital goods. I propose to clarify the scope of eligible capital goods by specifying the heading and sub-headings of the tariff relating to capital goods in the Modvat Rules. It is also a matter of concern that there is misuse of the Modvat credit scheme. At present, Modvat invoices can be issued by any dealer registered with the excise department and this facility is reportedly being misused. Therefore, I propose to restrict the issue of Modvatable invoices by dealers upto two stages. Suitable provisions are also being made in the Modvat Rules for charging of interest in the case of wrong availment of Modvat credit and for mandatory penalty for misuse of Modvat facility.

139. The tax on services has come to stay. With a view to widening the tax base, I propose to bring in advertising services, radio paging services and courier services under the tax net. The tax on these services will be at the rate of 5%. While this measure is expected to yield Rs.150 crore in a full year, I am taking credit only of Rs.70 crore in the current year.

140. My proposals relating to reduction in customs duties are estimated to result in a loss of Rs.650 crore in the remaining part of the current financial year. However, by taking into account receipts from the special customs duty estimated to be Rs.1600 crore, there will be a net gain of Rs.950 crore in customs revenue.

141. In the case of excise duties, including additional excise duties, a gain of Rs.760 crore is estimated. Of this, the States are likely to get Rs.384 crore as their share of excise duties.

142. I now have something to say on behalf of my colleague, the Minister of Communications. Postal rates, some of which were last revised in 1990, do not meet even the direct cost of most of the services resulting in increasing budgetary support. Notwithstanding this, no change in the rates of ordinary postcard, letter, parcels and other postal services is being proposed. A modest increase is proposed only in respect of two services which are used for business and commercial purposes. The rate of the printed post card is being increased from 60p. to Re.1 and the registration fee is being increased from Rs. 6 to Rs. 8. It has also been decided to introduce a new category of postcard, called Competition Postcard, which alone may be used for responding to any competition organised on or through television, radio, newspapers or magazines. It is proposed to remove the unintended subsidisation by fixing the tariff for this category of postcard at Rs.2. The changes will take effect from a date to be notified after the Finance Bill is passed. The revisions proposed are estimated to yield a modest revenue of Rs.38 crore in 1996-97, still leaving a large postal deficit.

143. Copies of notifications giving effect to the above changes in customs and excise duties will be laid on the Table of the House in due course.

144. My budget proposals have many implications both for the expenditure side and the revenue side. However, Hon'ble Members will be pleased to know that the end result is satisfactory. The revenue deficit in 1996-97 is placed at Rs.31,475 crore or 2.5% of GDP which is significantly lower than Rs.33,331 crore in RE 1995-96 or 3% of GDP. The fiscal deficit comes to Rs.62,266 crore in 1996-97, which is lower than the figure of Rs.64,010 crore in RE 1995-96. As a percentage of GDP, the fiscal deficit is 5% in 1996-97 compared to 5.9% in the previous year. I hope to do better in my next budget and move along the path of reducing the fiscal deficit to below 4%.

145. Mr. Speaker, Sir, at the end of this exercise, I ask myself what is a budget about? While it is a measure of the health of the economy, it is also a mirror to the travails and aspirations of the people. 2000 years ago, Saint Tiruvalluvar laid down the golden rule for the King's Ministers:

"Iyattralum, eettalum, kattalum, katta Vakuthalam Vallath Arasu"

(To be able to increase wealth, to lay it up and guard, And also well to distribute it, marks a royal lord.)

146. I have made an attempt to raise revenues without putting any burden upon the poor, to allocate large resources for agriculture, irrigation, infrastructure and the social sector, to provide more funds for basic minimum services, to give tax reliefs to the salaried and the middle classes and to promote savings and investment. I have strived to serve the seven objectives that I declared at the outset.

147. The Common Minimum Programme is absolutely right when it says that the country's GDP needs to grow at over 7% per year in the next 10 years in order to abolish poverty and unemployment.

148. I believe that our economy is on a high growth curve. Wisdom dictates that we remain on that curve. In order to do so, we need more reforms, not less. We need more resources, not less. We need more discipline, not less. And we need more compassion, not less. If we remain true to the Common Minimum Programme, we shall overcome our difficulties and take India to the frontline of the nations of the world. This budget, my maiden effort, attempts to blend - I hope in the right proportions - courage and compassion, reform and restraint and growth and social justice.

149. Mr. Speaker, Sir, with these words, I commend this budget to this august House.