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Wednesday,
March 5, 2003, Chandigarh, India  
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Budget: innovative in gimmicks APROPOS your editorial
“An innovative Budget” (March 1), I would like to disagree. To my mind, the Budget 2003-04 is a run-of-the-mill exercise, and at best can be described as “innovative” in populist gimmicks and window dressing, perhaps motivated by the ensuing general election in about a year’s time. This Budget hardly addresses the needs of “an economy on the move” and is basically inconsistent with the economic philosophy and strategy underlying the contemporary phase of the second generation economic reforms, which aim at exacerbating the rates of growth rather than simply achieving growth through productivity and efficiency enhancing measures; increasing competitiveness through cost reduction and quality enhancement, and demolishing the remaining vestiges of controls and regulatory mechanisms, to render markets more free, flexible and self regulating. On the agricultural front, the Budget fails to give a discernible direction and strength to the farm sector to enable it to take on the competitive challenge from efficient global farm producers. Instead of incorporating policy measures to induce diversification, cost reduction and employment generation, the Budget provisions might result in cost escalation due to higher diesel and fertiliser prices, rendering agriculture globally more uncompetitive, as well as jeopardising domestic food security, especially of the underprivileged sections. If we cannot make our agriculture cost effective especially through latest scientific research by laying a premium on R&D, bourgeoning food stocks become meaningless in view of the impending deluge of cheaper imported farm products. Our agriculture has already been grievously exposed vis-a-vis the evasively protected western agriculture.
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On the industrial front, a cut in excise duties would make many luxury consumer goods cheaper, including cars, air-conditioners, liquor, television, music systems and so on. But whereas it would only stimulate consumerism, while depressing the saving rate further (which has already plummeted from 27 per cent a couple of years back to about 24 per cent, as compared to 40 per cent in China). It would also jack up domestic and foreign investments in this sector, further accentuating inequalities and market concentration due to conglomerate growth through mergers and acquisitions — ominous for healthy market competition. Moreover, this sector is already overflowing with tremendous foreign investment, resulting in a disarticulated investment pattern vis-a-vis demand structure, eventuating in a slowdown over the last few years. Employment generating capacity of this hi-tech sector is also doubtful. Besides the above, hardly any effort has been made to improve the competitiveness of the industrial production, e.g. by initiating measures directed at stimulating industrial R&D and controlling cost escalation (except in biotechnology industry where research incentives have been provided in the Budget). Instead, with the lowering of the peak rate of Custom duties from 30 to 25 per cent, the Indian industry would be further exposed to cheaper imported goods. Industries like cement and steel might benefit due to aggravated demand from the construction sector, but due to higher costs, might encounter stiff competition from Japanese, Chinese, Korean and Taiwanese products. On the infrastructure front, the Budget does make a bold and fantastic effort by allocating Rs 40,000 crore for the development of roads and highways, but no explicit reference has been made as for the sources of generation of revenue to cover this stupendous amount, except levying a cess on oil for this purpose. Nevertheless even in the areas of infrastructure development, scant attention has been paid to the development of other physical and social infrastructure, including energy, education, and health, thus making infrastructure development lopsided. The Budget further lowers interest rates on household savings, including provident funds by one per cent, mainly with a view to supporting a low interest regime so as to make bank borrowings less costly, in order to induce larger commercial borrowings and investments. But the experience of the recent past, since the money market interest rates have been sharply cut, evinces much lower expansion in industrial investments in spite of cheaper money. In the absence of proper monitoring, more money has drifted into speculative and shady markets. So declining interest rates, besides depressing saving rates, have misdirected expenditures in undesirable avenues. The Budget does not give some relief to the middle income salaried groups, pensioners and other handicapped categories of the population, in terms of income tax rebates and concessions, though they may be quietly pinched by the impending inflationary content of the Budget due to much higher fiscal deficit. In all, the Budget adopts a piecemeal, patchy and disjointed approach-de-reserving some commodities from the small industry production, or giving direct and indirect tax concessions here and there, but it certainly does not conform to the enormity and comprehensiveness of the task required during the phase of second generation economic reforms. Rather with the high inflation rate, higher fiscal deficit, dwindling saving rates and distorted investment pattern, the emerging events do not augur well for achieving an ambitious 8 per cent growth rate for the economy as envisaged for the tenth Five Year Plan. VIKRAM
CHADHA, Professor of Economics,
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Shocking! The whole country is shocked at the way Shiv Sainiks (read Ravana sainiks) beat up former Chief of Navy Staff, Admiral Vishnu Bhagwat. Equally painful is the report that the Sangh Pariwar (and VHP in particular) is engaged in sending newsletters to high-ups in the defence forces informing them of the fights against Muslim rulers put up by Shivaji, Guru Gobind Singh etc. I am utterly terrified at the way communal colour is being imparted in our defence forces. Our defence is the last (and only) thread that binds us. The day the defence forces get divided, it will be the last day of peace, unity and sovereignty of our country. AKSHAY, Patiala
Senior Citizen at 60 The retirement age in most jobs is 60 year or less. One believes that to qualify for various concessions available to senior citizens, one should be over 60 years of age. The policy, however, is not uniform. Banks pay additional interest as applicable to senior citizens, to depositors who have crossed 60 years. In this year’s Railway Budget too, it is proposed to extend the concession to travellers who have crossed 60 years. However, in respect of income tax, concessions available to Senior Citizens are available only after the assessees cross 65 years of age. It is time the threshold age for Senior Citizens is uniformly made 60 years in all cases. P.K. HANDA, Panchkula
To my countrymen abroad I am eighty plus. I very much laud the concern of our NRIs for the country of their origin. They are remitting a lot of money in the form of donations from abroad for religious places here. Our younger generation badly needs good schools, buildings, furniture, drinking water, proper toilets and playgrounds for primary schools in villages. I feel the government has hardly made any effort to improve the condition of primary schools in villages, though it has from time to time suitably revised the salary scales of the teachers of these schools. So I with all due respect earnestly request our NRIs to liberally donate money to the primary schools of their respective villages as they are doing in the case of religious places for improving the condition of village primary schools. Our future generation will remember such NRIs with reverence for their generosity. BALWANT
SINGH, Mohali
Non-issue of PAN cards It has been found that heaps of PAN cards are lying in the commissioner’s offices undelivered. In some cases addresses are wrongly fed, in others either photos of applicants are wrongly pasted or their signatures are reversed. A gentleman from Delhi told me that he was issued five PAN cards with five different PAN numbers. Finally, he received a letter asking him to send his photo and signatures again to get his original PAN card. UJJAL
PAL SINGH, Faridabad
Quality of letters Being a regular reader of your paper for the last 20 years, I have noticed that for the last five-six months letters published in the Editor’s mail are not of much relevance to problems of society. Please try to publish those letters which stimulate others to think something, rather than informing them. Dr GURSIMRAT KAUR SANDHU,
Students locked up This refers to the news report “Students locked up” (Feb 24). Twentytwo students were locked up in a classroom of a convent school near Jalalabad on the Ferozepur road because they had not paid the computer fee to the school. This act of the school authorities is highly shocking and inhuman. Moreover, computer education is a part of the syllabus. Therefore, there should be no extra computer fee as charged by private schools. RAJINDER TANEJA, Malout
Tailpiece Q: What was the immediate reaction of cricket fans on India’s super victory over Pakistan on Saturday? A: In our batting, Sachin, Dravid and Yuvraj in store, Pakistan was easily packed-off to Lahore, Now, in Super Six, “yeh dil maange more”. JATINDER PURI, Chandigarh |
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