It has been a while I posted. Was busy with a country report on Singapore that I had to write for Dr. Jim Walker’s Asianomics. Completed it. Learnt a lot about Singapore in these three weeks, as much as I had learnt, perhaps, in my fourteen years of living here. I do not think that this record is something to be proud of.
While engaged in that talk, had to write a comment on the Malaysian budget for another client. The budget document was simple. The first two pages were dedicated to the praise of the Lord. Did not know that the country wanted to become a developed nation by 2020 with a per capita GDP of USD15,000.00. It was fascinating to get a pee into the politics behind subsidies reduction in that country. It is the same in most developed countries. The Malaysian Prime Minister invoked diabetes to remove subsidies on sugar. He is bringing in a Goods and Services Tax from April 2015. Before he could do so, he gave away a lot of income tax reliefs. One got the impression that there was serious intent on fiscal consolidation without follow-through in action. Must be familiar to readers in several countries.
The higher capital gains tax on foreigners speculating in Malaysian property was a rare case of fiscal populism and prudence combined.
The good thing about the document was that it was easy to read. It was not lengthy. It stated the growth assumptions upfront. There are still some things that MoF in India can learn from this budget document, even if serious and sincere fiscal consolidation cannot be one of them.