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Parliament With his own party’s expectations in an election year higher than he can handle, and an Opposition waiting to pounce on him no matter what, Finance Minister Chidambaram's Budget 2013-14 will have to deliver the impossible. By KV Prasad Exactly four days from today, UPA-2 Finance Minister P. Chidambaram will rise in the Lok Sabha at 11 am to present the last full Budget of the coalition government. And with it unveil a roadmap for the Indian economy. The Finance Minister faces an unenviable task of seeking to address the concerns on the imperativeness of reversing a slowdown in growth, provide impetus to kick-start the economy and balance it against mounting pressure from various competing interests who are hoping he will unveil measures that will raise the party stock in the political market and not just the bourses that trade shares. |
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Can UPA think out of briefcase... With his own party’s expectations in an election year higher than he can handle, and an Opposition waiting to pounce on him no matter what, Finance Minister Chidambaram's Budget 2013-14 will have to deliver the impossible. By KV Prasad
The Finance Minister faces an unenviable task of seeking to address the concerns on the imperativeness of reversing a slowdown in growth, provide impetus to kick-start the economy and balance it against mounting pressure from various competing interests who are hoping he will unveil measures that will raise the party stock in the political market and not just the bourses that trade shares. An interesting anecdote at a meeting of party leaders as early as November last year provided an insight into what is going in the mind of the Finance Minister. The occasion was soon after the Manmohan Singh government carried out a major reshuffle of the Council of Ministers and Chidambaram was called to narrate to the assembly the state of the economy. Chidambaram did not hold back the punches, urging each minister to be prepared to face a slash in the Budget. A candid admission that the sound the cash registers were making was certainly not sounding soothing. Adding to the woes, the international situation offered no comfort. It was time to tighten the belt and accept smaller slices form the pie. No sector, including the holiest of cows, defence, would be spared. “While asking each one of us to be prepared for the cut in allocation, he (Finance Minister) did promise that the next Budget will be good” a senior Union Minister told The Tribune a day after the plainspeak. The coming Thursday will be the day when the country would know how it translates into figures. Food security The person whose return to the north-side far-left corner office of the Finance Ministry on Raisina Hill was welcomed by the industry and corporates is now being looked to by the party and its leadership to crank up the numbers so that the much awaited social welfare measure — food security — can be rolled out. Will he do a 2008? To re-jog memory, as the Finance Minister in UPA-1, Chidambaram had come out with a Budget to back the spread of the National Rural Employment Guarantee Act (NREGA), rechristened after Mahatma Gandhi, and waived Rs 60,000 crore loans taken by farmers, a move that topped implementation of the pay commission recommendations. Demands for an encore were heard by Chidambaram as late as February 14 during a meeting with AICC functionaries, an exercise to take inputs from the party just as the Finance Minister does from various sections and interest groups in society in the run-up to preparing the Budget. Former Chhattisgarh Chief Minister Ajit Jogi was clear that the Budget should make increased allocation to support special schemes for the tribal people who were once with the Congress but gravitated towards the Bharatiya Janata Party. While one could dismiss this as being more relevant to the state that goes to the polls this winter but it does reflect the extent the leaders are willing to go to with populist moves. Of course, concerns also ranged from the urgent need to check spiralling rise in the prices of essential commodities, especially food articles, to “do something on fuel and avoid reducing subsidies” in a year the party faces elections in key Hindi heartland states of Rajasthan, Madhya Pradesh and Delhi, while preparing for the Lok Sabha polls in 2014.
Tuning in to FM For the middle class On his part, AICC secretary P. Sudhakar Reddy suggested: “The Finance Minister should consider raising income tax limit to Rs 4 lakh.” Besides sounding music to the middle classes, which is the new focus area of the party, it also seeks to upstage both the opposition BJP and surveys. A parliamentary panel headed by former Finance Minister Yashwant Sinha had recommended raising the income tax limit to Rs 3 lakh while a recent survey released by ASSOCHAM also underlined that the salaried class in trade and industry sector in addition want increased deductions for medical and educational allowances. “Pushing the basic IT exemption limit will also align with the proposals made by the Parliamentary Standing Committee on the Direct Tax Code, with increase in Rs 15,000 exemption for health care… additional benefits related to housing like the deduction limit for payment of interest have remained constant at Rs 1.5 lakh since 2001. There is an increase in property prices and accordingly the need for a loan. An increase in the exemption limit to Rs 2.5 lakh will be a welcome change,” the survey across major cities, including Delhi-NCR and Chandigarh, said. The middle and salaried class wish-list does not end here. It includes a hike in deduction limit under Section 80C of the Income Tax Act, moving the National Pension System away from the exempt-exempt-tax system. Serving all Suggestions from other interest groups are equally engaging. At a time when women’s issues have come under the spotlight, several national organisations, such as the All-India Dalit Mahila Adhikar Manch, Guild of Service and the Young Women Christian Association, have given a 16-point petition to the Finance Minister to ensure adequate resources for implementing and monitoring of legislations pertaining to women and children; increased budgetary support for schemes to assist women-headed households and single-women of different categories, allocating resources to create more jobs for women under specific schemes for unorganised sector, etc. Articulating the view point of the Left, a section that champions the cause of the poor and working classes, CPI national secretary and MP D. Raja said at a time of “galloping unemployment causing social tensions and conflicts, and growth rates coming down, revenue generation will be impacted unless tax rates are restructured… the focus of fiscal correction should be on revenue generation and not cutting expenditure… there is enough room. Introduce inheritance tax….” Raja felt that the government should remove tax concessions to the corporate sector; the treasury is foregoing some Rs 6 lakh crore under existing provisions. However, this is precisely the concern of the industry, as several trade bodies have expressed concern, who feel this talk of taxing the super-rich and imposing estate tax would prove counterproductive at a time when there is an expectation for tax breaks to encourage more investment and revive growth. A stimulus is what the industry expects. Clash of interest This is a classic divergence in approach. The industry wants a climate conducive for investment to revive demand while the Left parties feel that more government spending will spur demand for goods by putting more money in the hands of the poor. As for foreign investors, the government has already decided to postpone General Anti-Avoidance Rules, while the corporate sector hopes that the tax structure will not be tinkered with or excise duties increased. The prime concern of the Finance Minister is to reduce the fiscal deficit, which he promised to bring down to 5.3 per cent in the current budget and down to 4.8 per cent next. Will it be a Dream Budget of 1996 vintage? A Please-All Budget of 2008? Or a no-nonsense Budget, where pragmatism overrides populism? Choices are extremely difficult, as are the times. Will the Finance Minister be able to pull the rabbit out of the hat? No guesses here.
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...and also take care of vital legislation
Ordinances
There are a few Bills required to replace Ordinances, which has to be done in six weeks of a Parliament session beginning. The Criminal Law (Amendment) Promulgated by the President on February 3 this year, the Bill is mandatory to ensure Parliament legislates on the amendments made by the government to deal with sexual assault. Based largely on the recommendations of the Justice Verma Committee, there is a demand from parties to refer the Bill to the Parliamentary Standing Committee, a practice the government says does not exist in case of Bills replacing Ordinance but open to ideas and will go by the sense of the House. The Readjustment of Representation of Scheduled Castes and Scheduled Tribes in Parliamentary and Assembly Constituencies Bill, 2013 To replace the Ordinance promulgated on January 30 for inclusion or exclusion of SCs and STs and correct variations on figures based on the Census ending May 2012 as against March 2001. The Securities and Exchange of Board of India (Amendment) Bill, 2013 To replace the Ordinance promulgated on January 21, amending provision in appointing Presiding Officer of Securities Appellate Tribunal to be either a sitting or retired judge of the Supreme Court or sitting or retired Chief Justice of a High Court, or a sitting or retired judge of a High Court who has served at least for seven years in the position.
Bills on social issues
National Food Security Bill Aimed at providing assured amount of subsidised food grains to families that are entitled to receive it. Amid diverse opinion on its cost, the UPA government feels that enactment of this Bill would propel its political fortunes in the 2014 general elections, just as the NREGA did in 2009. The Prohibition of Employment of Manual Scavengers and their Rehabilitation Another social welfare measure moved by the government this year. This Bill too is under study by the Parliamentary Standing Committee concerned and its report is expected this session. Communal Violence (Prevention, Control and Rehabilitation of Victims) Envisaged to prevent the outbreak of communal riots, this proposed legislation allows state governments to notify an area as communally disturbed, doubles the punishment for certain crimes in such areas, provides for special courts and establishes a system for the rehabilitation of victims. Political differences have resulted in no movement since its introduction in the Rajya Sabha eight years ago. Legislation to fight corruption
Lokpal and Lokayuktas Bill Passed by the Lok Sabha in December 2011, it awaits consideration by the Rajya Sabha. A Select Committee, formed after the Bill passage was stalled in the House to reconcile differences, has reported it back to the House. The report delinked the creation of state Lokayuktas. Right of Citizens for Time-bound Delivery of Goods and Services and Redressal of Grievances Bill To set a minimum period during which citizens will be given a service. A Standing Committee report was submitted in 2012. Whistleblowers Protection Bill Drafted by the government in the wake of the murder of several people, including engineer Manjunath, for detecting illegal sale of adulterated petrol, the Bill has been passed by the Lok Sabha. Constitution Amendment Bills
Women’s Reservation (108th Amendment) Passed by the Rajya Sabha under controversial circumstances after protesting MPs were physically evicted The UPA claimed it demonstrated the commitment of the party leadership to empower women by reserving one-third seats in Parliament and state Assemblies but sharp differences have resulted in a stalemate. Reservation in Services to
SCs/STs (117th Amendment) Passed by the Rajya Sabha in the last winter session after BSP supremo Mayawati criticised the Chair. Bills seek to fix a judgment by the Supreme Court setting aside promotions for SCs and STs in service. — KV Prasad |
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