Financial Daily from THE HINDU group of publications
Saturday, Jan 10, 2004
Industry & Economy - Budget
Jaswant unveils another package Targets infrastructure, farm, rural housing, SME sectors
New Delhi , Jan. 9
TRUST the unpredictable Finance Minister, Mr Jaswant Singh, to break away from tradition in more ways than one.
If Thursday's "unexpected" package of various duty sops through a detailed circular which he himself referred to as a mini-Budget was directed at warming the hearts of the vast urban middle-class and select sectors of the industry, the Minister unveiled yet another package on Friday to assuage the feelings of those sections of the society that may have felt left out. And this included farmers and rural folk, small and medium industry entrepreneurs, senior citizens and students.
Significantly, in a break from tradition, it was the announcement on duty cuts and tax breaks that directly benefit the people normally contained in Part B of Budget speeches which came first, giving further spurt to the "feel-good" factor. And following it up on Friday, the Minister unveiled to editors at a select briefing the additional measures that are being initiated by the Government.
Interestingly, the nine schemes referred to in Part A of last year's Budget speech as the Government's "Panch Priorities" is the coalition's way of giving expression to the Prime Minister, Mr Atal Bihari Vajpayee's thoughts about `life-time concerns of citizens' encompassing several enabling measures and issues such as poverty eradication and addressing life-time concerns; infrastructure development; fiscal consolidation, ushering in a second green revolution in agriculture; and enhancing manufacturing efficiency.
"Our citizen is at the heart of the Panch Priorities. The measures being announced on Friday are within the ambit of the citizen's life-time concerns," Mr Singh said.
For instance, for fiscal consolidation in the matter of food policy management, the Food Corporation of India is being allowed to borrow from the market through bonds backed by a Government guarantee. The measure to be implemented from the new fiscal, Mr Singh said, would contribute to an annual reduction in the Centre's revenue expenditure on account of food subsidy by at least Rs 2,000 crore.
Most of the other measures, mainly funding schemes for farmers, rural housing and sanitation, small and medium industries and educational loans for students, entail funding by appropriate agencies at 200 basis points lower than the prime lending rate (PLR). The difference of 2 per cent rate of interest, officials explained, would be made good to the lending agencies, and the cost to the exchequer is not expected to be more than about Rs 40-Rs 50 crore per scheme annually. Besides, all the schemes are to be implemented either within four weeks or by April 1, 2004.
There is even a `Dada-Dadi' bond scheme for senior citizens above 60 years of age that will carry a rate of interest higher than the prevailing market rate. Evidently, this is to placate the aged and pensioners, who have been finding it difficult to pull on with falling returns on their life savings.
Do the announcement of these measures, spread over two days, indicate early elections? Mr Singh refused to commit himself. "As of now, I do not know whether I will have to present a vote-on-account (interim Budget) or a normal Budget. But the Ministry is prepared for both," he said.
THE Finance Minister, Mr Jaswant Singh, may have a few more surprises up his sleeve.
For one, he feels that the Reserve Bank of India's GDP growth projection of 7 per cent may be too conservative. "We in the Ministry feel that the RBI has been rather conservative," he said.
What makes him so optimistic? Offering a rosy scenario is the revenue collection.
"We will meet our revenue expectations of the Budget, maybe exceed them. No doubt in my mind that we will meet the revenue targets. I was myself pleasantly surprised at the performance of the economy."
The Minister refused to divulge any further details.
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2004, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line