New Delhi: The Union government announced on January 16 the establishment of 8th Pay Commission, a key policy decision impacting an estimated 4.7 million central government employees and 6.5 million pensioners. Traditionally, all state governments follow suit and execute key Pay Commission recommendations carried out by the Centre.

It is pertinent to point out that the announcement has come just about a fortnight ahead of the Union government presentation. This isn’t the first instance where the Union government has initiated key economic policy decisions outside of the Union budget stripping it of its core essence.

Earlier, on September 20, 2019, the Finance Minister slashed Corporate tax rates to 22 per cent for domestic companies and 15 per cent for new domestic manufacturing companies. The total revenue foregone for the reduction in corporate tax rate and other relief was then estimated at Rs 1,45,000 crore. The list of key policy decisions undertaken by this government and even earlier governments outside of the Union budget is endless. That in effect means the Budget ceases to be the defining policy document.

Earlier, the initiation of the Goods and Service Tax (GST), billed as a historic policy reform at the cusp of economics and politics, took away the core of tax adjustment capability assigned to the annual Budget.

The moot point being is it time to........

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