In policymaking, the first step comes with a second, third and more. And Finance Minister Nirmala Sitharaman has taken this tenet a bit more seriously extending it to the budget-making exercise.
Until now, the natural order was to seek inputs before budget and stakeholder interactions happened prior, not after.
But for the first time, India's federal budget-crew comprising Sitharaman and her battery of secretaries are taking a multi-city tour to explain and clarify the contents of the budget. They also plan to seek feedback from traders, industrialists, economists and academicians.
In one such pow-wows to decipher Sitharaman's sums held at Hyderabad on Sunday, the FM and her team had one broad point to put across - measures announced in the budget were preceded by analysis and only reason will dictate policy, not whim.
Take for instance income taxes. Thanks to Sitharaman, for both corporates and individuals, the country now offers a tax salad with an assortment of tax structures: one with all exemptions and the other with fewer deductions.
Critics might argue that it's a leap into administrative complexity, but when looked at from government perspective, our taxation laws are set for a radical overhaul.
In other words, Budget 2020 has actually written the first lines of the age-old I-T Act's obituary and exemptions are tipped for the full chop sooner or later.
Though the government aims at a simple, clear and lower tax rate system, it has avoided stating when it would be a reality.
The Ministry's simulations, based on previous year's tax data, showed that 69 per cent income taxpayers would gain net benefit switching to the new regime, with 11 per cent probably getting attracted simply due to simplification of the tax structure. Perhaps, the pace of adoption will fasten the overhaul.
Explaining the rationale behind the Tax Collection at Source (TCS) on remittance under the Liberalized remittance Scheme, finance secretary Ajay Bhushan Pandey said, the idea was to widen the tax net and prevent the sleight of hand.
The Ministry's internal assessments showed astonishing data with remittances shooting up to $14 billion in FY19 from $900 million a few years ago.
"Those who paid TDS need not worry as TCS isn't an additional tax and taxpayers can claim a full refund. We imposed TCS to get non-taxpayers into the tax net," Pandey said.
Similarly, when one of the participants questioned the imposing of 5 per cent cess on imported medical devices, which would help generate some Rs 4,000 crore, even as the government's Ayushman Bharat scheme has unutilized funds worth Rs 3,500 crore, Sitharaman clarified that the funds raised via cess was for building medical infrastructure in tier II and III cities.
She also added that the unutilized funds cannot be tinkered with for purposes other than subsidizing healthcare services for the poor.
Another participant wanted the Ministry to continue with dividend distribution tax (DDT), which is easy to administer (budget removed DDT for companies, but imposed it on retail investors).
Pandey clarified that the move was to help foreign investors, who were unable to claim benefits at their home base. "We need foreign capital," he said.
Meanwhile, amid the growing drumbeat of fiscal anxiety, Sitharaman was reiterating that fiscal discipline won't be compromised.
"We have not really breached the FRBM. We have not gone outlandish on it. We have kept fiscal discipline, which is a USP for both the Atal Bihari Vajpayee government and also for the Narendra Modi government," she said.