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| Thursday, March 1, 2001, Chandigarh, India   
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Growth plan for agro-sector Health allocation Rs 5780 cr Support to External Affairs down More sops for film
industry Minor relief to income tax-payer Sinha has smooth
sailing Yearly cut in Central
staff strength Loan scheme for students Bold and innovative Budget:
industry Pak concerned
over defence outlay hike Boost in funds
for rural development Rs 889 cr for ST/SC welfare How rupee comes, and goes
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Growth plan for agro-sector New Delhi, February 28 “Speeding up of the agricultural sector reforms and better management of the food economy is the broad strategy of the Budget,”Mr Yashwant Sinha said. And, the message was instantly welcomed by the captains of the Indian industry. Mr Arun Bharat Ram, President of the CII, said, “Mr Sinha’s emphasis on the agricultural sector would boost the all-round growth of the economy.” The revised Budget estimates for the Agriculture Ministry for 2001-2002 is Rs 3,009 crore, up from the revised Budget estimate of Rs 2,507 crore in 2000-01. The Finance Minister said the agricultural sector continues to be constrained by the existence of a number of inhibiting controls and regulations. “The government, therefore, proposes to review the operation of the Essential Commodities Act, 1955, and remove many of the restrictions that have been imposed on the free inter-state movement of foodgrains and agricultural produce and also on the storage and stocking of such commodities,”Mr Sinha said. He said the government would also review the list of commodities declared as essential under the said Act and bring their number down to the minimum required. Stating that the government’s policy has to be transformed to deal with surpluses rather than only shortages, Mr Sinha said the state governments would be given enlarged role in procurement and distribution of foodgrains for the PDS in their respective states. “Instead of providing subsidised foodgrains, financial assistance will be provided to the state governments to enable them to procure and distribute foodgrains to below poverty line(BPL) families at subsidised rates,” he said. The Finance Minister said the FCI would continue to procure foodgrains for maintaining food security reserves, and for such state governments who will assign it this task on their behalf. On the fertiliser subsidy, Mr Sinha said the government had decided to implement the recommendations of the Expenditure Reforms Commission for a phased programme to complete decontrol of urea by April 1, 2006. The Economic Survey said the pricing policy of urea units, which was presently under formulation, would not only aim at the introduction of a pricing policy, bringing in uniformity and transparency in disbursement of subsidy to urea manufacturers, but also encourage units to undertake cost reduction measures. Urea priced at Rs 4,600 per tonne is the only fertiliser which is under price, distribution and movement control. Mr Sinha said food preparation-based on fruits and vegetables are proposed to be completely exempted from excise duty and would include a wide range of products of common use like pickles, sauces, ketchup and juices. He said the shortage of foodgrains and their transportation were our major concern, and announced a tax holiday for five years and 30 per cent deduction of profits for the next five years to the enterprises engaged in the integrated business of handling transportation and storage of foodgrains. Mr Sinha also increased the credit flow to agriculture to Rs 64,000 crore from Rs 51,500 crore accounting for a 24 per cent jump. The interest rates of the National Bank for Agriculture and Rural Development have been reduced from 11.5 per cent to 10.5 per cent and Nabard continues to enjoy tax exemption on capital gains. Mr Sinha also announced the scheme for setting up agri-clinics and agri-business centres by agricultural graduates with the support of Nabard, aimed at diversification and modernisaiton of agricultural practices. These centres will provide a package of soil and input-testing facilities and other consultancy services, the minister said, adding that “this will strengthen transfer of technology and extension services and also provide self-employment opportunities to technically trained persons.” |
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Health allocation Rs 5780 cr New Delhi, February 28 Finance Minister Yashwant Sinha, presenting the General Budget for 2001-2002, said Indian System of Medicine and Homoeopathy would get benefits similar to the pharmaceutical industry. A traditional knowledge digital library would be established to prevent the grant of patents. A scheme for strengthening state drug testing laboratories and pharmacies would be introduced. The Budget outlay for the Department of Family Welfare had been hiked to Rs 4,232 crore from Rs 3,200 crore last fiscal, he said. Major allocations in the department goes towards services and supplies for which Rs 1,465 crore has been earmarked. The money provided for free distribution of conventional contraception was Rs 117 crore. Rural and urban family welfare services, reproductive and child health project and strengthening immunisation programme and eradication of polio get Rs 2,314 crore. The medical education training and research activities get Rs 809 crore while hospitals and dispensaries have been provided with Rs 178.71 crore. The NACO’s allocation remained the same as last year’s allocation of Rs 180 crore. Last year’s revised estimate for the ministry was Rs 2049 crore, including Rs 890 crore for non-Plan expenses. The north-eastern states, including Sikkim, get Rs 145 crore for various health programmes. The Department of Indian Systems of Medicine and Homoeopathy gets Rs 165 crore as against Rs 134 crore last year.
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Support to External Affairs down New Delhi, February 28 In its world-wide operations in the conduct of the nation’s foreign policy, the Finance Minister, Mr Yashwant Sinha, has also agreed to the Ministry of External Affairs proposal of increase in entertainment charges. Now the ministry, subject to Parliament’s final approval, would have Rs 23 crore for entertainment that is Rs 2 crore more over last year. Bangladesh has got Rs 114.45 crore which is Rs 30,70 crore more than the previous year’s expenditure. Bhutan has got only Rs 630 crore, a decrease of Rs 120 crore over last year. On Nepal operations , the ministry would be spending Rs 109.01 crore, an increase of Rs 47 crore. Even on Sri Lanka, the Budget has provided an increased sum of Rs 16 crore, an increase of Rs 5 crore. Myanmar gets Rs 20.75 crore, an increase of Rs 1.60 crore over the previous year’s revised estimates on this account. This provision is made for extending technical and economic assistance under various bilateral agreements and other special programmes to neighbouring and other developing countries besides providing for aid for disaster relief. For passport and emigration, the allocation has been marginally increased by Rs 2.51 crore from Rs 95.96 crore to Rs 98.47 crore, mainly to cater to expenditure on the computerisation programme of the passport offices, increased cost of passport booklets, enhanced rentals and expenditure on account of newly opened passport offices. The allocation for international cooperation has gone up by a little over Rs 3 crore for mandatory payments of contributions to the United Nations and its agencies, Commonwealth and SAARC secretariats and on account of depreciation of Indian rupee vis-a-vis major foreign currencies. The grant to the Indian Council for Cultural Relations has been stepped up marginally from Rs 39.65 crore to Rs 40 crore. While the allocation for housing has been increased to Rs 27 crore, a hike of Rs 2 crore over the last year’s revised estimates, the amount allotted for public works has been hiked by Rs 3.20 crore. The allocation on these heads are primarily for acquisition or construction and upkeep of residence and chanceries abroad. |
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More sops for film
industry New Delhi, February 28 While exhorting the industry to not to take any steps “chori chori, chupke chupke”, which was a clear reference to the reported nexus between a section of the film industry and the underworld, Mr Sinha called upon the industry to take advantages of government measures and bring about a greater degree of professionalism and transparency in its operations. Listing various measures, he said the film industry had two years ago been given the same tax exemption available for merchandise exports, and the IDBI Act had been amended in November to declare the film industry as an industrial concern and banks were finalising guidelines in this regard. There was bad news for those winning on the various game shows which have been introduced by the private satellite channels. The Minister announced a 30 per cent tax deduction at source on television gameshows, and also said foreign channels telecasting in India would have to pay income tax. Apart from announcing the setting up of a
Journalists Welfare Fund with a contribution of Rs 1 crore under the grants of the Information and Broadcasting Ministry, Mr Sinha said journalists were increasingly taking greater risks in covering terrorist and other violence-prone incidents. The fund was an acknowledgement of their services and sacrifices. The minister also announced that the five-year period for duty free import of equipment by accredited mediapersons for professional use was being reduced to two years. At present, they are allowed to import cameras, computers, fax machines etc up to a value of 1 lakh for their professional use without paying Customs duty once in five years. |
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Minor relief to income tax-payer New Delhi, February 28 Announcing the relief in the Budget for 2001-2002, the minister said the National Calamity Surcharge of one per cent on corporates and two per cent on non-corporates would continue in order to carry out relief work in quake-hit areas of Gujarat. As a result of withdrawal of surcharge, persons earning income between Rs 60,000 and Rs 2 lakh would have to pay a lower tax up to 12.82 per cent. A person with an income of 2 lakh has to pay a tax of Rs 34,680 next year against Rs 39,780 in the current year. The new rates for the next financial year are: Income slab (Rs) Rate of tax Up to 50,000 nil 50,000 to 60,000 10 per cent 60,000 to 1.50 lakh 20 per cent plus two per cent surcharge Above 1.50 lakh
30 per cent plus two per cent surcharge |
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Sinha has smooth
sailing New Delhi, February 28 While more or less, Mr Sinha had a peaceful time, he began his speech amid charges that the Budget had already been leaked to the media. Mr Sinha, who personally was making fourth Budget presentation, created many firsts today as he not only began reading his speech at 11 in the morning unlike in the previous years when the Budget used to be an evening exercise, but also gave almost no opportunity to otherwise vocal, vitriolic and vociferous MPs from both NDA allies as well as Opposition ranks to disrupt the proceedings. Wearing a light blue ‘Jodhpuri’ suit, the Finance Minister opened his 36-page speech with his left hand in the trousers’ pockets and the other on the copy saying, “The challenges we face this year are awesome, made more so by the tragedy and devastation caused by the Gujarat earthquake”. The next sentence seeking “understanding and support of the whole House” in his endeavour to meet these challenges was a psychological move to condition the minds of the members for ensuring a smooth passage. While the speech was marked by minor disruptions from the usually loud high-pitched speaking Rashtriya Janata Dal MP, Mr Raghuvansh Prasad Singh, and the habitually voluble Samajwadi Party MP, Mr Akhilesh Singh, the Finance Minister and the Samajwadi leader, Mr Mulayam Singh Yadav, had a minor exchange of words when the former announced that all processed food items were being exempted from excise duty, and the latter asked as what he was doing for “aloo” (potato). At this, Mr Sinha came with an immediate repartee, saying that he was going to make “aloo chokha” (a dish made of potato in UP and Bihar) which turned Mr Yadav speechless for a minute and the House burst into laughter. As soon as Mr Sinha finished reading Part-A of the Budget, he paused for a while, saying that he would like to have water before starting with Part-B consisting of tax proposals as afterwards the Opposition would be scurrying for water. But then even his tax proposals failed to ignite much fireworks from the opposition benches barring some murmuring and low-key protests when the Finance Minister came to lowering of interest rate on small savings including on provident fund. When Mr Sinha referred to his plans of reduction of government staff, a member commented as “what would you do with army of ministers”. Earlier, referring to his much criticised penchant for fiscal discipline, Mr Sinha said that he has been called a fiscal fundamentalist and some have even gone to the extent of calling me a “fiscal terrorist”. “I hope Jaipal Reddy is listening” but Mr Reddy, who is also the Congress spokesman, was not to be seen. Announcing his plans for bank financing of movies and films, the Minister provoked the House into laughter when he said:”I hope the film industry will take full advantage of these measures to bring about a greater degree of professionalism and transparency in its operations, and will not do things chupke chupke and certainly not chori chori.” At this, the Mrs Renuka Choudhary (Congress) was heard saying that “Chori to aap ka
kam hai”. The Opposition and Treasury Benches broke into laughter again when the Finance Minister made his proposal of setting up a journalist welfare fund and quipped that he hoped that the media would not trouble the government any more. Surprisingly, this time the Opposition as well as Treasury Benches were not fully occupied and even different galleries barring the Rajya Sabha gallery were empty. The speech ended with the NDA MPs congratulating the Finance Minister and the Opposition shouting slogans of Budget being “anti-poor” and “pro-MNCs”. |
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Yearly cut in Central staff strength New Delhi, February 28 The Finance Minister said all requirements for recruitment to the Central Government would be scrutinised to limit fresh induction of civilian staff to 1 per cent. About 3 per cent staff retires every year. Other measures include moderate revision of postal rates to help contain rising postal deficit and increase in standard licence fee on government accommodation from April 1. He said recommendations of the Expenditure Reforms Commission would be implemented by July 31, 2001, and identified surplus staff transferred to surplus pool. This pool will be streamlined to re-deploy and retain the surplus staff. It has also been decided to suspend ltc facility to Central Government employees for two years for the remaining part of the four-year block period, except for employees entitled to the last ltc before retirement. A new insurance policy will be announced by June to provide compensation of up to 30 per cent of the last drawn annual pay for a period of one year to workers who lose their jobs, Mr Sinha said. He said the new policy, called “ashraya bima yojana”, would be administered by four government-owned general insurance companies on a “no profit, no loss” basis. PTI New Delhi February 28 |
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Loan scheme for students New Delhi, February 28 Finance Minister Yashwant Sinha said that the country was determined to strengthen its competitiveness in the field of information technology. He said that new technical institutes would be set up in public-private partnership. A new Centrally-sponsored scheme for computer literacy and studies in schools had been launched and other initiatives planned for encouraging IT education from school to college levels, he said. The Finance Minister said that over 100 per cent deduction from income tax on payments made to institutions of vocational education would also be available for payments made to engineering institutions. The minister said that the Indian Banks Association (IBA) had formulated a new comprehensive loan scheme which would cover all courses in schools and colleges in India and abroad. Loans would be available under this scheme up to Rs 7.5 lakh for studies in India and Rs 15 lakh for studies abroad. No collateral or margin would be stipulated for loans up to Rs 4 lakh, the interest of which would not exceed the prime lending rate (PLR). The interest would not exceed PLR plus 1 per cent for loans above Rs 4 lakh. The loans would be repaid over a period of five to seven years with provision of grace period. The minister said that the Rashtriya Mahila Kosh would be strengthened to provide micro-credit to poor assetless women through NGOs. He said that a new scheme would be started for women in difficult conditions like widows in Vrindavan and Kashi and other disadvantaged women groups To improve the welfare of STs, a separate National Scheduled Tribes Finance and Development Corporation with an authorised share capital of Rs 500 crore had been set up. The allocation by the Ministry of Tribal Affairs had also been enhanced from Rs 786 crore to Rs 986 crore. Similarly, the allocation in the Ministry of Social Justice and Empowerment had been enhanced from Rs 709 crore to Rs 790 crore. The Finance Minister said that the Janshree Bima Yojana, which was aimed at extending social security cover to the poorest sections of the society, now encompassed 332 schemes. The minister announced two new schemes — the Khetihar Mazdoor Bima Yojana for the landless agricultural labourers and the Shiksha Sahyog Yojana — to provide education allowance of Rs 100 per month to the children of parents living below the poverty line. These schemes would be managed by the LIC. The wage ceiling for coverage under the EPF and MP Act 1952 had been enhanced from Rs 5,000 to Rs 6,500. The government had proposed to enhance the ceiling for government contribution of 1.16 per cent of monthly wage of employees to the Pension Fund from Rs 5,000 to Rs 6,000 per month. The minister said that Insurance Regulatory Development Authority had been asked to look into the problems of unorganised sector which did not have adequate social security coverage. The plan allocation for the Ministry of Health and Family Welfare had been stepped up from Rs 4,920 crore to Rs 5,780 crore. This included an allocation of Rs 180 crore for HIV control programmes. The government also proposed to establish Traditional Knowledge Digital Library to bring the knowledge already in the public domain in international languages to prevent grant of patents. The Indian System of Medicine and Homeopathy would be given benefits similar to pharmaceutical industry, the FM said. |
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Bold and innovative Budget:
industry New Delhi, February 28 The captains of industry urged Mr Yashwant Sinha not to buckle under any pressure on the Balco disinvestment issue as it would send a wrong signal. The Chairman of Ernst and Young, Mr K. N. Memani, said the Budget has sufficient measures for boosting investment in infrastructure and will generate demand across various sectors of the economy. The bold initiatives like downsizing, labour sector reforms, reduction in dividend tax and the decision to implement the 11the Finance Commission's recommendations on effectively checking recruitment and cutting Non-Plan expenditure, the CII president, Mr Arun Bharat Ram said. Mr Vinayak Chatterjee, the chamber's northern region chairman, said the Minister has not given any clear signal to the SSI unit as only a month is left for the WTO provisions to be implemented. Mr Vikran Paul, director of Union Transport-India, said it is "fairly positive" for the freight industry because of its commitment to the development of infrastructure, specially ports. The PHDCCI president, Mr Sushil Ansal, said the housing sector, which holds the key to the revival of industrial activity has not been given due importance. The 15 per cent custom duty on telecom products will have a positive effect on the Capex of Telecom projects coming down, Mr Dilip Modi, Spice Cell head said, adding, “The duty could have gone down still further." Dr Suresh Nanda of STG International Ltd said the tax concession provided to the telecom industry is expected to improve the overall telecom infrastructure and benefit the IT industry and tax exemption on onsite consulting, which provides large revenues for Indian IT companies, is also positive. Mr Sudhir Mehta, managing director of Pinnacle Industries, said for the furniture industry, the Budget will provide for an increased presence of the organised sector, which , today, constitutes a very small percentage to the overall sector. Mr Arvind Singhal, managing director of KSA Technopak, said several sectors stand to benefit from the overall realisation of indirect taxes, the textile sector is likely to get much deserved relief. Removal of some fiscal anomalies in the spinning and processing sector will go a long way in restoring economic parity across sub-segments. The tariff reform in power sector has been long overdue. However, absence of specific provision of performance by SEBs linked to tariff could result in passing on inefficiencies and corruptions prevailing in SEBs to private sector in the form of higher power tariff. Also missing is the reviewing the subsidised power to large agricultural users at the cost of industrial user, said Mr Siddhartha Ray, managing director of Data Access India Ltd. |
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Pak concerned over defence outlay hike Islamabad, February 28 Foreign office spokesman Riaz Mohammad Khan said India had launched itself on a “massive programme of expansion of its conventional capability” without regard for regional stability. The massive acquisition of armaments by India is a cause for concern for Pakistan because the bulk of India’s Army is deployed on the Pakistani border,” he said. Therefore, we cannot but be deeply concerned, he added.
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Boost in funds for rural development New Delhi, February 28 While Rs 9224.49 crore has been allocated for the ministry in the 2001-02 Budget, the revised estimates for the previous year was Rs 8888.39 crore. The revamped programme of rural employment, aimed at creating need-based rural infrastructure at the village level to boost rural economy, gets Rs 2925 crore against the previous year’s revised estimates of Rs 2798.40 crore. Subsidy to District Rural Development Agencies has received a hike of over Rs 85 crore in the next year’s Budget while the Swarnajayanti Gram Swarozgar Yojana has received a jump of Rs 80 crore.
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Rs 889 cr for ST/SC welfare New Delhi, February 28 Against the revised estimate of Rs 1225.56 crore for 2000-01, the ministry has been sanctioned Rs 1045.26 in next year’s Budget with thrust on welfare of Scheduled Castes, Scheduled Tribes and Other Backward Classes. Welfare of SCs, STs and OBCs account for Rs 889.23 crore compared to Rs 743.67 crore in the previous year, marking an increase of over Rs 145.50 crore. Allocation for welfare schemes for the uplift of STs in the Ministry of Tribal Affairs has been enhanced from Rs 786 crore in 2000-01 to Rs 986 crore in the 2001-02 Budget estimates. Likewise, allocation for welfare schemes for uplift of SCs in the Ministry of Social Justice and Empowerment has been enhanced from Rs 709 crore in 2000-01 to Rs 790 crore in the 2001-02 Budget. A ‘Rashtriya Mahila Kosh’ will provide micro-credit to poor women through NGOs, while an integrated scheme for women’s empowerment in 650 blocks through self-help groups will be launched. Schemes would also be launched for women in difficult circumstances like widows of
Vrindavan, Kashi and other places, destitute women and other disadvantaged women groups. PTI |
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How rupee comes, and goes New Delhi, February 28 Accounting for 27 paise of every rupee earned, borrowings overshadow excise at 19 paise, customs at 12 paise and non-tax revenue at 16 paise, according to the Union Budget. On the other hand interest payments account for 26 paise of every rupee spent followed by expenditure on defence at 14 paise, Central Plan at 14 paise and states’ share of taxes and duties at 14 paise of every rupee spent. State’s share of taxes, duties and assistance provided to them together account for 23 per cent of the government’s expenditure, with nine paise of every rupee earned going into state and union territory Plan assistance. While corporation tax accounted for 10 paise of every rupee earned this fiscal, income tax collections accounted for nine per cent of the country’s earnings in 2001-02.
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