Over the last decade or so, on account of the media hype that surrounds the presentation of a budget it has become an event that is awaited by all. The manner of presentation of a budget has gradually changed over the years. Each finance minister wishes to leave his own mark on the budget. This year there is a change in the date on which the budget will be presented on account of the elections in various states which are scheduled to be held in February. The February budget fever will now raise its head in the month of March.

The year that has gone by has indeed been a difficult one for the ruling government particularly on the economic front. The Finance minister has had to walk the tightrope between two challenges, the first being spiralling inflation and the second being the faltering economy. In regard to the first the government seems to have met with some degree of success while on the latter the failure seems to be continuing. Most core sectors are showing a slowdown in growth which is bound to affect the projected rise in GDP. As a corollary the, share markets have remained depressed and consequently the government has been unable to meet its disinvestment targets. Coupled with this, the growing outlay on subsidies is going to make a hole in the government's finances. The fiscal deficit therefore is going to cross the budgeted figure. The Reserve Bank of India and has also had to strike a fine balance between regulating money supply to check inflation and in ensuring the requisite liquidity in the money markets to meet demands of business. Consequently in the last announcement by the Reserve Bank of India in regard to monetary policy we found a easing of the CRR norms while the interest rates remained unchanged.

To an extent one can sympathise with the UPA government since some of the problems that it faces are not its own creation but they have been compounded by a total policy paralysis. The government has failed to introduce the policy initiatives which it was expected to do. In regard to these matters it has been unable to keep its flock together, let alone the take the opposition into confidence. The last session of Parliament was devoted to the Lok Pal issue and even that bill has now not seen a passage through the Rajya Sabha. The passing of the Bill would not have ended corruption but at least the government would have sent out a signal that it was a serious in tackling the root of the problem. Unfortunately we are today back to square one on this issue.

Since the Lok Pal Bill took centre stage in the last session, much other important legislation did not get the requisite attention that it deserved. One hopes that now the parliament will get down to the serious business of debating upon and passing the legislations like the Companies Bill and the Direct tax code, the latter being the one which the finance ministry seems to be keen on passing. While the Direct Tax code (DTC) may not be become law in the immediate future it is virtually certain that some provisions of the DTC will find their way into the ensuing budget. One expects that the general anti-avoidance rules will form part of the Finance Bill in this year. If that happens, and the provisions do not have adequate safe guards their introduction would open the floodgates to litigation.

On the direct tax front the Vodafone judgement by the apex court has upset the government's calculations in a substantial manner. Given the tenor of the Bombay High Court judgement a major section of tax professionals, businessmen and even sections of the media believed that this decision would go the government away. That it did not do so is an indicator of the independence of the last bastion of democracy in our country that is the judiciary. The judgement is being dissected and analysed by professionals for it lays down many significant principles of law. One expects that the effect of the judgement will be overcome by amendments to the law. One cannot have any grudge on the government’s right to legislate if it does not agree with the law laid down by the Supreme Court. One only hopes that these amendments will be prospective in nature and not retrospective because amendments made retrospectively to nullify the effect of Supreme Court judgements tend to undermine the authority of the judiciary. Not being able to collect the tax, which the government believes it is entitled to, will aggravate the problem of a fiscal deficit. However, upholding the independence and moral strength of the judiciary is far more important.

Over the last few years our profession has been facing a lot of flak. As I had said in my last communication the perception of the role of the auditor in the minds of the public as well as other stakeholders is reflected in the proposed amendments to the Companies Act. Both the public and the regulators have substantial expectations from the audit profession, but neither appreciates the limitations within which an auditor functions. The expectation gap instead of being bridged is widening. One expects that the profession will face a lot of new challenges of this nature in future.

In this background it is heartening to note that the powers that be, on the occasion of Republic Day, have recognised the role of Chartered Accountants in Society. The Padma Shri award has been conferred upon Mr. Y. H. Malegam, a doyen of our profession. Mr. Malegam has a number of achievements to his credit and in our profession he stands tall in every sense of the term. Every young Chartered Accountant would look up to Mr. Malegam for his commitment to the profession. One admires him not only for his intellectual abilities but also for the impeccable manner in which he is conducted himself in public life. I have heard number of people in different walks of life shower praise on this great personality. The words of the governor of the RBI at the conference of the Western India Regional council of ICAI, and the utterances of Mr. Chandrababu Naidu, former chief minister of Andhra Pradesh at our recently concluded residential refresher course are two such recent occasions. On behalf of all members of the BCAS and readers of the journal I take this opportunity to heartily congratulate Mr. Malegam on his achievement and wish him a long and healthy life. In his receiving the award the profession has been honoured.

On this happy note let me sign of off with the hope that many such awards are received by many other deserving members of our profession!