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500 pc hike for Ministry of Overseas Indian Affairs
New Delhi, February 28 The ministry had been allocated Rs 7 crore as per the Budgetary Estimates (BE) last year. This was hiked to Rs 10 crore in the Revised Estimates (RE). Today’s Budget proposals have hiked the allocation to the ministry to Rs 35 crore. A large chunk of this amount, Rs 20 crore, is being provided for the expenditure on the Secretariat of Ministry of Overseas Indian Affairs. Provision has also been kept for advertising and publicity efforts and for holding seminars and studies. A total of Rs 12 crore has been provided under the head “external affairs” which takes into account international conferences and meetings, entertainment charges, and public works for acquisition and construction of Pravasi Bharatiya Kendra. MEA BUDGET: The budgetary provision of the Ministry of External Affairs (MEA) for the year 2005-06 has been raised marginally to Rs 3928 crore, from last year’s RE figure of Rs 3885 crore and BE figure of Rs 3540.69 crore. In the MEA Budget, an interesting thing is that there is no mention of India’s huge financial assistance to Afghanistan. India has already deployed more than Rs 96 crore of the Rs 100 crore assistance to Afghanistan, which is in addition to Rs 100 crore worth foodgrain shipments to Afghanistan. The MEA Budget does mention Indian assistance to Bangladesh, Bhutan, Nepal, Sri Lanka, Maldives, Myanmar, “other developing countries”, “aid to African countries” and Central Asia. The largest chunk of MEA Budget estimates for 2005-06. Rs 872.43 crore-goes for the upkeep of India’s 162 embassies and missions all over the world. This figure is less than last year’s RE of Rs 896.26 crore. The second highest allocation in the MEA Budget-of Rs 841 crore-is under the head “Special Diplomatic Expenditure” which provides for discretionary expenditure. PMO BUDGET: Expenditure for the office of Prime Minister Manmohan Singh and National Advisory Council headed by Ms Sonia Gandhi, listed together, has been increased in the 2005-06 Budget proposals by Rs 1.73 crore from Rs 14.59 crore last year. The BE for PMO for 2004-05 was Rs 14.39 crore which was raised to Rs 14.39 crore in RE. |
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Jump shows modernisation of armed forces a priority
New Delhi, February 28 It amounts to an increase of almost 7.8 per cent over last year’s revised estimates. While announcing the Budget estimate of Rs 83,000 crore for 2005-06, which would include an allocation of Rs 34,375 crore for capital expenditure, Finance Minister P. Chidambaram pointed out that it was after a gap of many years that defence expenditure had matched the Budget estimate of Rs 77,000 crore. Finance Minister presenting his first budget of this term in July last year had increased the allocation by Rs 17,000 crore over the revised estimate and Rs 11,000 crore over the Budget estimates for 2003-04. Pegging the country’s defence expenditure at 3.29 per cent of the GDP, the Finance Minister has this year again brought down the country defence spending in
comparison with other big spenders in the field in the Indian sub-continent. For the first time last year India’s defence spending had come somewhere near that of Pakistan and China, both of which spend in the region of above 5 per cent of their GDP. While earmarking Rs 34,375 crore for capital expenditure the Finance Minister has in real terms marked only an increase of about Rs 1,000 crore over last year’s arms acquisition funding of Rs 33,472 crore. However, in actual terms it amounts to fresh allocation as the ministry for the first time in five years has been able to spend all allocated funds under the head last year. The capital outlay funding in fact almost constitutes 41.4 per cent of the total defence budget. Labelling the hike in the allocation as “good”, Mr Mukherjee said this signalled that the modernisation drive in the armed forces would be given more momentum. Incidentally, the Ministry of Defence while making presentations in front of the Ministry of Finance officials earlier in the month had sought a hike of almost 20 per cent over last year’s allocation. The Defence Minister said the increased allocation was a huge step-up in this drive. “We almost have more than Rs 34,000 crore as fresh allocation and this would enable us to go ahead with some vital hi-tech weapons systems.” However, experts pointed out that the percentage increase this year was less than the amount required to stand the effect of the general national inflation and the military deflation. In the Indian context, a figure of about 10 to 12 per cent will have ensured the same level of Budget support for defence as previous year’s at constant prices, they said. Even though the government’s stress is on modernisation of the armed forces, experts pointed out that there was actually a marginal decrease in the capital allocation for the three forces over last year. This year, while the capital outlay has increased marginally by 2.66 per cent from Rs 33,483 crore to Rs 34,375 crore, the share of the three Services—-the Army, Navy and Air Force—-as a whole has shrunk by about Rs 500 crore from Rs 31,490 crore in the last fiscal to Rs 31,001 crore this year. The new budget estimates also show a 21.1 per cent jump in spending for the defence research and development, with allocation increased to Rs 2,814 crore from last year’s figures of Rs 2,343 crore.
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PC prefers Amartya to Dickens
New Delhi, February 28 The man who hit the headlines with his ‘Main Hoon Na’ (I am there) dialogue appeared more business-like this year and instead of English novelist Charles Dickens chose to quote noted economist and Nobel Laureate Amartya Sen. “My redemption lies in good deeds and not in good words”, he had said last year comparing himself to Pip, the protagonist of Dicken’s ‘Great Expectations’. However, this year, he appeared more realistic quoting Sen, “growth of GNP or of individual incomes, can, of course, be very important as means to expanding the freedoms enjoyed by members of society. But freedoms depend also on other determinants, such as social and economic arrangements (for example, facilities for education and health care) as well as political and civil rights”. Though he quoted his favourite Tamil saint poet Thiruvalluvar this year too while concluding his speech, it was philosophic last time and more materialistic this time. — PTI |
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Central ministers get Rs 32.70 cr less for tours
New Delhi, February 28 The budgetary provisions for tour expenses have been put at Rs 47.50 crore, which is Rs 32.70 crore less than that of last year’s fiscal figure of Rs 80.20 crore. The provision of tour expenses is meant for Cabinet ministers, Ministers of State and former Prime Ministers. According to the budgetary provision for the Ministry of Home Affairs, the salaries of Cabinet ministers, Ministers of State and deputy ministers remain stagnant at Rs 1.16 crore. |
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Fiscal deficit pegged at 4.3 pc
New Delhi, February 28 The Budget has pegged the revenue deficit at 2.7 per cent of the GDP for 2005-06, same as the revised estimate for 2004-05. The revenue deficit target is marginally higher by 0.2 per cent from 2.5 per cent budgeted for 2004-05. For 2005-06, total revenue receipts have been budgeted at Rs 3,51,200 crore as against revised estimate of Rs 3,00,904 crore and budget estimate of Rs 3,09,322 crore for 2004-05. Of the total revenue receipts, tax collections are slated to grow by over 21 per cent to Rs 2,73,466 crore next fiscal from the revised estimate of Rs 2,25,804 crore. Non-tax revenues will go up marginally to Rs 77,734 crore next fiscal from the estimated Rs 75,100 crore in 2004-05. Capital receipts are targeted lower at Rs 1,63,144 crore next fiscal as against Rs 2,04,887 crore in 2004-05 despite a hike in borrowing and other liabilities. |
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Duty on petro products cut
New Delhi, February 28 Though a road development cess of 50 paise a litre has been imposed on petrol and diesel, oil companies made it clear that the petrol prices will not be increased in March. "The proposed changes are revenue neutral, and I have been assured that there will be no increase in the retail prices of these products as a result of the changes in the duty structure," Finance Minister said in his Budget speech. The reduction in duties on domestic cooking gas (LPG) and kerosene for public
distribution system will help oil companies contain their losses they were incurring because of not being allowed to change retail prices in line with the change in prices of raw materials. Besides, the government has left subsidies on domestic LPG and kerosene unchanged. Customs duty on crude oil has been halved to 5 per cent while that on kerosene for public distribution system and LPG for domestic use has been slashed from 5 per cent to nil. Excise duty on the two has also been brought down to nil, from 12 per cent (kerosene) and 8 per cent (LPG) respectively. Import duty on petrol and diesel has also been reduced from 15 per cent to 10 per cent each while on the excise duty front, the government, with a view to check the impact of the volatility in international oil prices, moved from ad valorem duty structure on petrol and diesel to a combination of lower ad valorem duty plus specific duty. Petrol will now attract 8 per cent excise duty plus Rs 5 per litre instead of present 23 per cent duty. On top of it, there will be road cess and Rs 6 per litre special additional excise duty. On diesel, excise duty would be 8 per cent plus Rs 1.25 per litre as against present 8 per cent duty. Road cess will be added to it. Indian Oil Corporation has maintained that they will suffer monthly losses worth Rs 450 crore to Rs 500 crore on the sale of petrol and diesel. But the reduction in excise and customs duty to nil on LPG and
kerosene would bring Rs 150 crore benefit to them. |
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Chidambaram sugarcoats reform measures
New Delhi, February 28 Desks were thumped in chorus when Chidambaram announced that exemption limits are being raised to Rs 1 lakh. However, with the same breath, the
lawyer-turned-politician, abolished chunk of the savings instruments by removing the benefits granted under Sections 88 and 80L of the Income Tax Act. This measure, which could affect the salaried section of society, whose only incentive to save is tax reduction, got little attention by the members of Lower House. However, his proposal to levy tax on withdrawal of cash on a single day of Rs 10,000 or more from banks at the rate of 0.1 per cent or Rs 10 for withdrawal of Rs 10,000 evoked a vociferous protest from Opposition. Chidambaram said, “These cash withdrawals leave no trail, and presumably become part of the black economy.” Opposition members were up on their feet to say nobody keeps black money in bank and this tax is unwarranted. Clearly indicating that the reform measures would continue and the Foreign Direct Investment in the country would be given a fillip despite the opposition expressed by the Left parties, he said, “there are opportunities in other sectors as well such as mining, trade and pension.” All eyes in the House focused on CPI member and a veteran trade union leader Gurudas Dasgupta with the NDA members urging him to react. Chidambaram appeared more realistic as he quoted noted economist and Nobel laureate Amartya Sen: “growth of GNP or of individual incomes, can, of course, be a very important means to expanding the freedoms enjoyed by members of society. But freedoms depend also on other detriments, such as social and economic arrangements (for example facilities for
education and health care) as well as political and civil rights.” The Finance Minister concluded his speech by quoting his favourite Tamil saint poet Thiruvalluvar. “Health, wealth, produce the happiness that is the result and security. These five, the learned say, are the ornaments of a polity.” Perhaps, the only time the Finance Minister departed from his prepared text and spoke emotionally was while announcing fixing of threshold exemption level for women and senior citizens. “I hope I will be twice blessed by women and senior citizens,” he said. The political situation in Bihar found ample reflection in the attendance of MPs from the state during the Budget presentation. With the NDA deciding to adopt a wait-and-watch’ approach and the UPA making an all-out bid for government formation, RJD supremo
Laloo Prasad and kingmaker and LJP Chief Ram Vilas Paswan were missing. But all prominent JD (U) leaders, including NDA’s chief ministerial candidate Nitish Kumar and alliance Convener George Fernandes, were present throughout the address. JMM’s Shibu Soren too appeared to be occupied with the government formation exercise in Jharkhand. |
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Reforms to touch Bharat
New Delhi, February 28 “In agriculture, we shall enhance public and private investment in the infrastructure required to support expansion, diversification and value addition,” Finance Minister said drawing out the road map for growth in the rural India. Chidambaram focused on giving easy loans to farmers, setting up knowledge centres in every village, continue the with fertiliser subsidy, revival of sugar sector and crop diversification focussing on cash crop and horticulture. He said “with about two-thirds of the population dependent on agriculture and the sector producing only 21 per cent of the GDP in 2003-04, it is imperative that we address the problem of our farmers with a sense of urgency.” On rural credit and indebtedness, he said the Reserve Bank of India would examine the issue of allowing banks to adopt the agency model, by using the infrastructure of civil society organisations, rural kiosks and village knowledge centres, to provide credit support to rural and farm sector. Although the flow of agricultural credit has been below par, he said Rs 108,500 crore would be disbursed this fiscal. Chidambaram said he would the commercial banks, RRBs and cooperative banks to increase the flow of credit by another 30 per cent in 2005-06. Further, the public sector banks would be asked to increase the number of borrowers by another 50 lakh. Admitting that the cooperative banks in the country are in shambles, except a few and they have difficulty in assessing refinance for agricultural credit, and the task force set up to rejuvenate the cooperative banks has submitted its report, which the government has accepted in principle. Finance Minister said he would hold consultations with the state governments to implement the report. Chidambaram said the National Agriculture Insurance Scheme would continue in its present form for kharif and rabi 2005-06. He said benefits of insurance should percolate to rural India and to the vulnerable section of the population. Micro insurance is a distinct product and the government would extend full support to the efforts of IRDA to promote micro insurance.
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Bharat Nirman by 2009
New Delhi, February 28 “Bharat Nirman” will require huge resources. The government believes that it is an achievable project and it is our intention to give rural India a new deal fully involving the Panchayati Raj institutions in planning and implementation, he said while presenting Union Budget 2005-06. |
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