CMP revisited in President146;s address

President APJ Abdul Kalam8217;s address to the Parliament was the Common Minimum Programme of the United Progressive Alliance government on...

President APJ Abdul Kalam8217;s address to the Parliament was the Common Minimum Programme of the United Progressive Alliance government once more. The address, which was a promise of the policy direction the new government would take, spelt out its commitment to reforms, including 8216;8216;privatisation on a case-by-case8217;8217; basis, stable taxes, encouragement to FDI and an economic growth of 7 to 8 per cent.

Continuing with CMP lingo, 8216;8216;efficiency and equity8217;8217; with 8216;8216;fiscal and financial discipline8217;8217; was the underlying theme of the presidential address with an eye on the markets and India Inc, who were closely awaiting the policy direction of the government. The statement promised eliminating the revenue deficit by 2009 so as to release more resources for investment in social and physical infrastructure.

The markets have been nervous since the new government took over especially due to some anti-reform noises from its left-wing supporters. But on Monday the markets ended the day slightly higher on the correct noises on reforms in the President8217;s address.

While the President8217;s statement promised 8216;8216;stable and conducive to growth8217;8217; tax rates, it also said all central taxes would now carry a cess to fund education. Kalam said the government would deepen the financial markets, encourage foreign institutional investors FIIs, while protecting the interests of small investors and give new avenues for safe investment of their savings and strengthen Sebi.

In what could come as a relief to reformers and market watchers, the address pointed out that while the government was committed to a strong and effective public sector, privatisation would be considered on a case-by-case basis and chronically loss-making units could be either sold off or closed after providing legitimate dues and compensation to workers.

The address stated its affirmation to introduce the value-added tax VAT but that would be done in close cooperation and consultation with trade and industry.

Subsidies meant only for the poor was something the government has promised ,but only after a detailed roadmap was prepared for the purpose.

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Recognising the need for changes in labour laws for rapid growth of the manufacturing sector and expansion of employment opportunities, Kalam said such changes would, however, ensure workers and their families were protected.

With a view to providing guaranteed employment for 100 days in a year to at least one able-bodied person in each rural household, a National Employment Guarantee Act would be legislated soon, just as the CMP had promised. Employment would also be pushed in areas like small scale sector, services sector, village industries, textiles, handicrafts, forestry, dairy and agro processing.

Kalam said the development of infrastructure would get a high priority and public-private partnership would be encouraged for expansion of physical infrastructure such as roads, ports, airports, power, railways and water supply and sanitation.

The address recognised the need for stepping up investments in the energy sector. While a mention of encouraging overseas investments in the hydrocarbon sector has been made, emphasis was also laid on the stepping up of public investment in the power sector.

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The address stated the need for adequate steps to be taken to ensure farmers8217; interests vis-a-vis the World Trade Organisation as also the textile industry, which would see the end of quotas in January, 2005.