It’s a poll Budget, doesn’t meet CMP promises: Left

Reacting to the Budget, CPI (M) leaders said the Finance Minister’s (FM) announcement of debt waiver for farmers was a welcome and long overdue step, but the proposed measures are deficient since they would exclude the bulk of the small and marginal farmers of dryland areas who typically own more than 2 hectares of land. The measures also do nothing to provide relief against the debt owed by the peasants to private moneylenders, which is estimated at more than two-thirds of total farm debt.

Speaking to the media after the Budget, CPI(M) leader Sitaram Yechury said the Rs 60,000 crore loan waiver for farmers would only benefit those farmers who have taken loans from nationalised banks and government agencies. “However, around two-thirds of the farmers have taken loans from private moneylenders. The FM could have considered a one-time settlement for this category of farmers or could have proposed some regulation on the interest charged by private moneylenders,” Yechury said. He added that even when the Government’s revenue collection has increased by 18 percent, the money spent on developmental activities was only half of it, at nine per cent.

The CPI(M) leaders said the Budget has not addressed the inflation trends in the economy adequately, particularly those related to food and fuel prices. The food subsidy is budgeted to increase by only about 3.5 percent over 2007-08 (revised estimate), which actually entails a reduction in real food subsidy since the Budget assumes an over 6 per cent inflation rate, they said.

“It is clear the Government does not envisage an expansion of the PDS in order to provide protection to the people against rising food prices. While the shift from the ad valorem to a specific rate on the excise duty on unbranded petroleum is a welcome measure, this would not have any impact on the high fuel prices. Petrol and diesel prices could have been brought down had there been similar restructuring of the customs duties on petroleum products,” they added.

Calling the I-T relief for the middle class a positive step, the CPI (M) welcomed the increase in the rate of the short-term capital gains from 10 per cent to 15 per cent and the introduction of a commodity transactions tax. The Left also said the FM’s move to increase the outlay for the National Rural Employment Guarantee Scheme by around 20 percent, when the number of districts covered under the scheme has almost doubled, did not give an appropriate signal.