M A I N   N E W S

Jaswant rolls back urea price hike
Tribune News Service

New Delhi, March 11
Barely 10 days after presenting his maiden General Budget, Finance Minister Jaswant Singh today announced the first rollback in the fertiliser prices under political compulsions.

Succumbing to pressure from the Opposition as well as the NDA’s ruling allies, Mr Jaswant Singh today rolled back the proposed urea price hike levied in the Budget 2003-04 and announced 1 per cent interest cut on loans and advances to the Central Government employees for housing, purchase of computers and conveyance. He, however, was silent on the other major demand for the rollback of hike in diesel prices.

The fertiliser price rollback would cost the exchequer Rs 700 crore. The Budget had effected a Rs 12 subsidy cut per 50 kg bag of urea and Rs 10 subsidy cut per 50 kg bag for other chemical fertilisers.

The minister made the announcements in the Lok Sabha in his 75-minute reply to the three-day debate on the General Budget following which the House passed the vote-on-account by a voice vote for over Rs 1,47,700 crore for the first few months of the coming financial year. With this, the Lok Sabha has completed the first of the three-stage budgetary exercise.

Mr Jaswant Singh said he was deeply hurt by comments in the press and by the members which described him as “arrogant and stubborn.” Even Congress leader Margaret Alva had levelled other allegations about his personality.

An emotionally charged Mr Jaswant Singh was in a mood to bare his chest today and disclosed that he rang up Prime Minister Atal Behari Vajpayee in the morning. Mr Vajpayee advised him not to bother too much about what people had to say but obey the “voice of his God.”

The minister said his conscience-searching exercise convinced him that he was not rigid about his views. He said if the entire House so felt then he was willing to withdraw the urea price hike even though the arguments raised about drought were not valid because a drought-hit poor peasant could hardly afford fertilisers.

Agriculture will get a major boost as credit to the sector will now be cheaper by at least 2 to 3 per cent. Loans will be made available to the sector at two per cent less or more than the prime lending rate (PLR) after the PLR rate was announced by the Reserve Bank of India (RBI).

Loans to the small scale sector (SSI) will also be made cheaper, on a par with the agriculture sector.

The Finance Minister said a novel scheme was being worked out to improve the flow of agriculture credit by making it available through 1,26,000 post offices which the minister said were acquainted with cash handling.

The private sector banks too would be encouraged to open more rural area branches.

Of the Rs 28,000 crore food subsidy, a major component went to the fertiliser subsidy, while the rest was shared by the minimum support price (MSP) and poverty reduction schemes.

Almost the entire fertiliser subsidy was going to inefficient naphtha-based units and the government, in its fertiliser policy, had declared that it would encourage production by efficient units.

Hardly any subsidy accrued to the farmer and, therefore he found no merit in the hue and cry raised over the urea price hike. “I have taken back the increase in the rate of fertilisers (to the tune of Rs 700 crore)”.

“But if you don’t want any increase then so be it,” he said pointing out that majority of the fertiliser subsidy went to help inefficient units and did not go to farmers.

He announced the reduction of 1 per cent interest rate on fresh loans given by the Centre to states.

He said the agriculture credit would be provided at PLR plus or minus 2 per cent from April 1 this year. This will make agriculture credit 2 to 3 per cent cheaper. The new PLR rate will be announced by the Reserve Bank of India soon.

He said the rising curve of fiscal deficit had begun to come down even as the economy was facing exceptional difficulties like the unprecedented drought, global downturn and the uncertainty of geo-political situation.

He said the growth rate of revenue collection of 13 per cent for the next financial year was achievable.

Mr Sinha said a Constitution amendment for phased removal of central sales tax had already been moved in Parliament.

He said the government was committed to make the country a global health destination. “I believe India has the potential and talent to become a global destination for which we have to improve the infrastructure and the arrival and departure in airports.”

On the pension scheme for people of 55 years and above, he said the Life Insurance Corporation was preparing a policy with an annual interest rate of 9 per cent per annum.

He said the government had deliberately chosen 55 as the minimum age as many people retired in this age group.

He said if by any means the scheme was “hijacked”, the government would relook at the ceiling level which currently had not been fixed.

Meanwhile, Minister for Chemicals and Fertilisers Sukhdev Singh Dhindsa today informed the Lok Sabha during question hour that the new pricing scheme for urea units should come into effect from April 1 this year.

He said under this scheme, the units shall be placed in six groups based on vintage and feedstock, for determining the groupbased concession rates.

He said the group concessions rate on April 1, 2003 would be computed on the data of the units as on March 31 this year.

Cong seeks withdrawal of diesel cess
Tribune News Service

New Delhi, March 11
The BJP and NDA allies have welcomed the rollback in the prices of fertiliser, while the Congress sought the withdrawal of special cess on diesel.

Hailing Finance Minister Jaswant Singh’s announcement in the Lok Sabha today on the rollback in fertiliser prices, BJP spokesman V.K. Malhotra said it was the desire of the party that all benefits of the rollback should go to the farmers and the government could evolve a process to ensure this.

He said the party was happy that the Finance Minister had considered the demands articulated by Members of Parliament from all sections, including the BJP. Mr Malhotra said the BJP leaders would hold rallies in their constituencies and other parts of the country to highlight the “people-friendly” budgets presented by the NDA government. The rallies would be held between March 19 and April 6.