________________________________________________________________________________
Bharatiya Parliament, New Delhi, Bharat, May 15, 1946
The Parliament building buzzed with anticipation as members of the Lok Sabha gathered for the first parliamentary session of Bharat. Today, the Financial Minister, Shyama Prasad Mukherjee, was set to propose the inaugural budget of the nation. The air was thick with expectation, as this budget would lay the foundation for Bharat's future.
As the session commenced, Aryan Yadav, the President, took his seat, his eyes scanning the assembly. The members settled into their places, the room falling into a respectful silence as Shyama Prasad Mukherjee rose to speak.
"Honorable members of the Lok Sabha," Mukherjee began, his voice steady and confident, "Today, I present to you the first budget of Bharat. This budget is crafted with the vision of 'Unity, Prosperity, and Self-Reliance.' It reflects our commitment to building a strong, equitable, and self-sufficient nation."
He paused, allowing the weight of his words to sink in before continuing. "Our estimated revenue collection stands at ₹3,000 crore, during the previous fiscal year. This includes ₹800 crore from direct taxes, ₹1,000 crore from indirect taxes, ₹400 crore from non-tax revenue, and ₹800 crore from foreign aid and grants, mainly from the British reparation aggreement and Allied grants for war-time."
Interestingly, the US dollar at this period of time was valued at about 1 USD = 3.3 INR, which with the conversion applied makes the total revenue during the previous fiscal year as 9.09 billion USD. This was not only due to the agricultural, marine and dairy sector exports during the war time with the arrival of the three coloured revolution, but also due to the new industries lead by Aryan's and other significant business ventures like Tata which was already a big name along with others cropping up in Bharat. So, with the significant amount of spending on modernization and inclusion of advanced technology in Bharat's military as well as the war effort and the overall infrastructure development of Bharat across different sectors of the nation, made the revenue of 9.09 billion USD look small and thus there was a need for a budget which focuses on making Bharat self reliant as soon as possible.
Mukherjee detailed the revenue projections, breaking down the sources of income. The members listened intently, nodding in agreement as he outlined the financial strategy.
"Now, let us turn to the expenditure breakdown," Mukherjee said, moving to the next section of his speech. "We have allocated ₹3,000 crore across various sectors to ensure balanced development."
________________________________________
Expenditure Breakdown
1. Economic Development (40%) - ₹1,200 crore
- Agriculture, Marine and Dairy sector: ₹400 crore
- Industrial Development: ₹300 crore
- Infrastructure: ₹300 crore
- Energy: ₹200 crore
2. Defense and Security (25%) - ₹750 crore
- Upgrading military technology
- Establishment of naval bases across the Indian Ocean territories of Bharat
- Expansion of Bharat's Air Force
- Border security, patrol and infrastructure development across the vast border of Bharat including those with Afghanistan, Tibet and China.
3. Social Welfare (20%) - ₹600 crore
- Education: ₹200 crore
- Healthcare: ₹200 crore
- Housing and Urban Development: ₹100 crore
- Women and Child Development: ₹100 crore
4. Trade and Commerce (10%) - ₹300 crore
- Tax rebates for startups and MSMEs
- Simplifying trade policies
- Building Bharat as a hub for technology exports
5. Emergency Fund (5%) - ₹150 crore
________________________________________
Mukherjee elaborated on each allocation, emphasizing the importance of economic development, social welfare, and defense. "Our focus on agriculture, industrial development, and infrastructure will drive economic growth, while investments in education and healthcare will ensure the well-being of our citizens."
He then addressed employment creation, a critical aspect of the budget. "We have allocated ₹200 crore for rural employment schemes and ₹150 crore for industrial job creation. Our goal is to employ 5 million rural workers and attract private investments in tech industries."
As the session continued, Mukherjee outlined the tax reforms aimed at equitable wealth distribution and economic stability. "We will introduce progressive income tax brackets, reduce import duties on essential goods, and provide tax incentives for businesses employing local labor."
Aryan Yadav leaned forward, listening intently as Mukherjee continued, "We have designed a tax reform system for Bharat in 1946, focused on wealth creation, equitable distribution, and economic growth, requires balancing immediate needs with long-term sustainability. You can look through the entire proposal but I will list aome important facts an improved tax reform plan tailored for the era:
________________________________________
(You can skip this)
Tax Reform and System for Bharat (1946)
Objective:
To create a tax system that:
1. Promotes industrial growth and wealth creation.
2. Ensures equitable wealth distribution.
3. Reduces tax evasion.
4. Simplifies compliance for individuals and businesses.
I. Direct Tax Reforms
1. Progressive Income Tax Structure
- Rates:
- Income up to ₹2,500 per annum: No tax (to support the poor).
- ₹2,501–₹10,000: 5%
- ₹10,001–₹50,000: 10%
- ₹50,001–₹1,00,000: 20%
- Above ₹1,00,000: 30%
- Features:
- Tax rebates for small farmers, war veterans, and women entrepreneurs.
- Deductions for investments in advanced technology startups, infrastructure bonds, and rural development projects.
2. Corporate Tax
- Rates:
- Small businesses (turnover < ₹5 lakh): 10%
- Medium businesses (turnover ₹5 lakh–₹50 lakh): 20%
- Large businesses (turnover > ₹50 lakh): 30%
- Incentives:
- 5-year tax holiday for industries investing in rural areas or advanced technology sectors.
- 50% reduction for businesses employing 50% or more local labor.
II. Indirect Tax Reforms
1. Simplified Sales Tax System
- Sales tax rates streamlined to avoid regional disparities:
- Essential goods: 2%
- Consumer goods: 5%
- Luxury items: 10%
2. Excise Duties
- High excise on non-essential imports (luxury goods, tobacco, alcohol).
- Lower excise on domestic products to encourage local manufacturing.
3. Customs Duties
- Policy:
- Low tariffs on imports of essential machinery and raw materials.
- Higher tariffs on finished goods to promote domestic production.
III. Wealth and Property Taxes
1. Land Tax
- Progressive rates for landowners based on landholding size and usage.
- Agricultural land actively cultivated: Minimal tax.
- Idle or unproductive land: Higher tax to discourage hoarding.
2. Inheritance Tax
- Tax on wealth transfer over ₹1 lakh to reduce wealth concentration.
- Rates:
- ₹1 lakh–₹5 lakh: 5%
- Above ₹5 lakh: 10%
IV. New Taxes to Foster Development
1. Development Bonds
- Citizens and corporations encouraged to invest in government-issued development bonds with tax benefits.
2. Advanced Technology Innovation Tax
- A 1% levy on large corporations, exclusively funding advanced technology research and innovation.
3. Export Duty Exemptions
- No export duties on goods produced with domestic raw materials or advanced technology products to incentivize exports.
V. Taxpayer Services and Compliance Simplification
1. Introduction of the National Taxpayer Number (NTN)
- A unique identifier for every taxpayer to simplify tax filing and track compliance.
2. One-Stop Tax Filing Centers
- Offices in all major towns to help citizens and businesses file taxes with ease.
3. Taxpayer Education Programs
- Campaigns to educate citizens on the benefits of paying taxes and the importance of compliance.
4. Reduction of Corruption and Leakages
- Establishing an independent Tax Ombudsman to address grievances and prevent misuse of power by tax officials.
VI. Wealth Creation Policies Through Taxation
1. Encouraging Entrepreneurship
- Deduction of up to 50% of profits for new businesses in their first 3 years.
- Lower tax rates for industries in advanced technology, textiles, and agriculture.
2. Capital Gains Tax
- Waived for reinvestment in industries, housing, or infrastructure.
3. Export Promotion
- Export-oriented industries given a tax rebate of up to 10%.
4. Public-Private Partnerships (PPPs)
- Tax exemptions for private entities collaborating with the government on infrastructure and social development projects.
VII. Expected Impact
- Short Term:
- Increased revenue to fund social and economic initiatives.
- Greater compliance due to simplified systems.
- Long Term:
- Enhanced wealth generation through entrepreneurship and industrialization.
- Reduction in income disparity.
- Creation of a strong domestic market with export-oriented industries.
________________________________________
Mukherjee concluded with the fiscal strategy and vision statement. "This reformed tax system lays the foundation for Bharat's economic renaissance. By balancing growth, equity, and innovation, we aim to create a prosperous nation where every citizen thrives."
He then listed one by one in detail about the Key Policy Announcements which were:
1. R&D Fund for Advanced Technology: ₹50 crore for advanced research labs.
2. National Cooperative Bank: ₹100 crore for supporting small farmers and businesses.
3. Food Security Act: Subsidized grains for the poorest households.
4. Internal Security Program: Deployment of advanced tech surveillance systems in cities.
Mukherjee concluded with the fiscal strategy and vision statement. "We aim to manage the deficit at 3% of GDP through foreign aid and domestic borrowing. Our focus is on economic self-reliance by 1955 through reduced import dependence."
He ended his speech with a powerful vision statement. "This budget marks the beginning of Bharat's transformation into a prosperous, self-reliant, and equitable nation. With unity and innovation, we shall build a future where every citizen has the opportunity to thrive."
The hall erupted in applause, the members rising to their feet in a standing ovation. Aryan Yadav exchanged a proud glance with Mukherjee, knowing that this budget was a significant step towards realizing their vision for Bharat.
________________________________________________________________________________
Thanks for reading 🙏 🙏.
Please support this novel through the power stones and let me know your thoughts in the comments.