New Delhi, February 28
Terming the 2002-03 Budget as “bold” despite the global recession, Prime Minister Atal Behari Vajpayee today asserted economic reforms would not affect developmental activities and that employment opportunities would be improved.
Some “unavoidable” burden has been passed on to the common people but “I am sure they will accept it,” he told newspersons after the presentation of the General Budget 2002-03 in the Lok Sabha.
Mr Vajpayee said, “Economic reforms are a must but developmental activities will not be allowed to suffer. The budgetary proposals will ensure that economic reforms and development go hand in hand.”
Observing that the economic situation globally was difficult, he said the Budget would help improve the economic situation with special focus on agriculture, rural development, housing and building of road network.
“Garibi hatao (remove poverty) is not a mere slogan now but is becoming a reality,” the Prime Minister said giving his reaction on the Budget.
However, the NDA allies Telugu Desam Party (TDP) and the Trinamool Congress asked the government to reconsider the hike in prices of LPG and kerosene as well as cut in fertiliser subsidy, saying that it would affect the farmers and the poor people.
“The TDP Parliamentary Party has requested the government to reconsider its budget proposals in these three areas,” TDP leader K Yerrannaidu told newspersons.
Though TDP, extending outside support to the government, favoured the government’s reforms process, its prime concern was for farmers who would be “most affected” by the increase in LPG and kerosene prices and reduction in fertiliser subsidy.
Trinamool Congress leader Sudip Bandhopadhyay said while the government was aiming at a “free the farmer policy”, it was increasing the LPG and kerosene rates which would hit the farmers.
MDMK leader Vaiko said though the Budget was a well-balanced one to meet the challenges faced by the government, the cut in fertiliser subsidy would affect the agriculture sector and the increase in LPG and kerosene would hit the common man.
Opposition parties today dubbed the Budget as “anti-farmer” and “anti-poor” even as some of the allies of the BJP asked the government to reconsider proposals to increase LPG and kerosene prices and cut fertiliser subsidy.
“This Budget exposed the government’s dependence on foreign companies who can destroy the level playing field of Indian industries,” senior Congress leader Priyaranjan Dasmunshi said.
He said it would see an end to the small-scale industry and would further weaken the poorest of the poor by increasing the prices of LPG and kerosene.
Shivraj Patil, Deputy Leader of the Congress in the Lok Sabha, described it as a “beaten track” Budget and complained that the agriculture sector has not been given enough attention.
CPM leader Somnath Chatterjee accused the government of being dictated by the WTO and the USA and said, “We have lost our economic independence”.
He said foreign companies and corporate houses have been given encouragement while most sections of the people would be affected by the proposals.
“With this Budget, we are in a deeper mess. There is no explanation why there is a slowdown in the industry from six per cent to 2 per cent,” he said.
Finance Minister Yashwant Sinha said the 5 per cent national security surcharge would mop up resources and curtail rising fiscal deficit, but sought to delink it from industrial demand.
“I have to find the money somewhere given the difficult fiscal situation. I can’t produce it (money) out of the blue. We must remember the difficult situation on the borders,” Mr Sinha said when asked whether this surcharge would further hit the already slowed manufacturing sector and adversely affect demand.
He said the defence allocation had been increased by Rs 3,000 crore and Plan allocation had also been hiked by 20 per cent, adding the incremental component of surcharge was only 3 per cent since two per cent Gujarat surcharge stood abolished.
“Tax is not the only component to demand. Only 2.5 crore people pay taxes.....Also, the incremental increase is only 3 per cent,” he said while delinking demand from the proposed surcharge.
Justifying the Budget proposals, Mr Sinha said one must perceive these in perspective.
Mr Sinha identified overall consolidation of economic reforms, partnership with states towards fiscal reforms and continuation of privatisation drive as key features of the Budget.
Asked about the poor reaction of markets to the Budget, with the BSE sensex falling by as much as 107 points immediately after the Budget announcements, Mr Sinha shrugged it off saying, “Markets have their own reasons to react”.
The Finance Minister defended the defence surcharge, stating that he had not hit at the bottomline (net profits) of companies, adding that last year’s removal of surcharge had not really resulted in significant revenue accruals.
He said the revenue projections were as realistic as possible and he hoped to maintain the fiscal deficit at the targeted 5.3 per cent for next fiscal.
