Disinvestment drive marks Outcome Budget

Despite opposition from the Left parties, the Finance Ministry today outlined that it would pursue the disinvestment of large profitable public sector undertakings during 2006-07.

Despite opposition from the Left parties, the Finance Ministry today outlined that it would pursue the disinvestment of large profitable public sector undertakings during 2006-07.

Stating its intention in the Outcome Budget presented in Parliament today, the ministry outlines that the government8217;s emphasis is to list, large, profitable PSUs on domestic stock exchanges and to selectively sell small portions of equity in listed, profitable PSUs other than the navaratnas. The proceeds would go to the National Investment Fund.

The Finance Ministry8217;s statement on disinvestment comes at a time when the Performance Budget for 2005-06, which was also tabled in Parliament today, shows that overall expenditure for the department of disinvestment is on decline. As against an expenditure of Rs 44.34 crore in 2003-04, this expenditure is estimated to be only Rs 6.14 crore during 2005-06.

The initiative to detail ministry-wise performance of the government started in 2005-06 when the Finance Minister tabled the first outcome budget in August 2005. This year, individual ministries have tabled their Performance Budget for 2005-06 and have also tabled their Outcome Budget for 2006-07 which indicates ministry8217;s plans.

While growing tax collections have been highlighted in the recent past, the fact that the cost of collecting direct taxes had dropped wasn8217;t known. While in 2000-01, 1.36 paise was spent on each rupee of tax collected, the cost of collection in 2004-05 had dropped to 0.86 paise per rupee.

Incidentally, the consistent annual average growth in tax collections of 24 per cent from 2001-02 to 2004-05, is the first time in 35 years that tax collections have increased by more than 20 per cent for three consecutive years.

In a separate statement of intent for 2006-07 from the Planning Commission whose outcome budget was also tabled in Parliament today, the government would undertake a comprehensive study of the total transport system. The objectives of this study would involve generating and analysing inter-modal transport resource costs and traffic flows covering railways, highways, airways and shipping.

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The Civil Aviation ministry in its outcome budget for 2006-07 has indicated that a comprehensive 8216;tourist-friendly8217; Civil Aviation Policy is being finalized. Moreover, a lot more action can be expected in the coming year on the airport infrastructure front, despite the Left parties8217; vehement opposition to the modernization of Delhi and Mumbai airports.

For starters, it is proposed to declare Port Blair, recently included in the Indo-Thai Air Agreement, as an international airport. Non-metro airports are to be developed in a phased manner. Financial consultants and technical advisers have already been appointed for the ten airports8212;Ahmedabad, Amritsar, Goa, Guwahati, Lucknow, Madurai, Jaipur, Mangalore, Trivandrum and Udaipur.

Similar studies are about to commissioned for 15 more airports. Five more airports have been identified for which the process of appointing technical advisers has taken off8212;Dehradun, Agartala, Imphal, Ranchi and Raipur.