But as we pointed out, logic is hardly the basis of introducing FBT in a fast growing economy that is starved of employable people. The domestic venture capital (VC) industry is another that is seriously upset at the budget. In a representation to the government they have pleaded against the amendment to restrict the pass-through benefit to Indian venture capital companies only to income received from a specified list of industries. The change virtually cripples the domestic VC industry because those wishing to invest outside the specified list will not be able to raise funds. At the same time the exchequer will earn very little revenue because foreign funds, which account for 90 per cent of the investments, are unaffected by the budget provisions. It means that the government has chosen to hurt the growth and development of the domestic VC industry, without even the justification of collecting significant tax revenue.

This, as they point out, is especially unfair because the mutual funds enjoy blanket pass through, although they risk retail investors’ money and have a much shorter investment horizon. So, in the end, astounding as it may seem, a supposed progressive and liberal FM has hit at the most enterprising and wealth-creating parts of the economy, whether in the manufacturing sector that is coming out of deep recession or in services which is India’s growth engine. And all this while proclaiming that there are hardly any change in taxes in this budget.