Job guarantee to cost Rs 68,448 cr

The country’s leading economic think-tank National Council for Applied Economic Research (NCAER) has put the cost of implementing the 1...

The country’s leading economic think-tank National Council for Applied Economic Research (NCAER) has put the cost of implementing the 100-day employment guarantee scheme for one member of every poor household at Rs 68,448 crore spread over five years.

For implementing the common minimum programme’s (CMP) commitment of raising the investment on health and education from 4.5 per cent of gross domestic product (GDP) to 8-9 per cent in five years, the Union and the states will have to jointly shell out Rs 19,000 crore to Rs 25,000 crore in 2004-05 itself.

The NCAER’s recent analysis, ‘CMP: A Plenitude of Promises’ has also provided some hints to finance minister P Chidambaram on how to raise resources to fund these ambitious social sector programmes of the United Progressive Alliance (UPA) government.

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The NCAER report wants Chidambaram, who is in the midst of preparing his budget to be presented on July 8, to focus on implementation of a comprehensive CENVAT, state level VAT, service tax and increasing tax base. It also warned that Chidambaram should not succumb to pressure on raising tax rates as the same would hamper growth. The council has also suggested that the government should reduce the interest rates on Employees’ Provident Fund (FPF) lest it should become another Unit Trust of India (UTI).

The council specifically mentioned that the transport sector is worth

Rs 1.6 lakh crore and 8 per cent tax could yield Rs 12,800 crore. As similar tax on goods transported by rail could yield Rs 2,200 crore raising the total to Rs 15,000 crore.

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