Promises still to keep

We are worried whether these expenditures will be maintained because they are linked directly to a level of revenue buoyancy 8212; which the Budget anticipates 8212; given that the record for 2004-05 is not very good. The broad tax revenue last year was to the tune of Rs 3,06,000 crore while the target was Rs 3,17,000 crore. That means there will be a shortfall of nearly Rs 11,000 crore. If this will be this year8217;s experience as well, then we anticipate that there will be cuts in these expenditures. In which case, what will actually flow to the people will be much less.

But there are some welcome features. For the first time since the reform process began, you do not have a revenue head in the Budget from disinvestment, which is in line with our understanding that liquidating public assets for meeting daily requirements of expenditure makes neither economic sense, nor common sense.

Second, the overall rationalisation of customs and excise duties has been in the right direction, particularly with reference to petroleum products. We have been arguing that the duty rates on petro products cannot be high in a country like India, which relies for three-fourths of its consumption on imports, and much of the high prices of these products are due to these duties. The reduction of these duties to zero, for both kerosene and LPG, are in the right direction. But the 50 paise cess that has been imposed for road construction should have avoided diesel because that will have a cascading inflationary impact, and we wish the FM would reconsider this point. While collecting a cess for road construction is important, diesel should have been spared.

Another area of concern is the agricultural sector. There has been a Central Plan outlay increase in this sector from the revised estimates of last year to the tune of Rs 1,600 crore. Although welcome, it is not adequate, and we think some other steps are required to protect the peasantry who are under tremendous agrarian distress today. This would be in the area of adequate tariff protection for domestic production and less emphasis on crop diversification. Instead, more attention should have been given to foodgrain production, which is essential to prevent the starvation deaths that are being reported.

Also, we are wary about some of the references made in the Budget. For instance, the RBI being asked to provide a roadmap on the issue of banking reforms. There have been many proposals in the air for allowing FDI into Indian banks which we are concerned about. Also inducting FDI into areas like mining and pension funds, both of which are areas where the induction of FDI may not be the interest of our country and the people.

On the allocations for education, public health 8212; these are areas which we have been emphasising and have also been mentioned in the CMP. We are also happy that a fresh allocation has been made for the National Rural Employment Guarantee Scheme, although we feel that it should be to the tune of Rs 20,000 crore instead of Rs 11,000 crore. The attention to health is good, but again the allocation is a mere Rs 2,000 crore, considering health expenditure is only 0.9 of the GDP. This warranted something more.

But promises have more or less been kept as have the concerns of the coalition. Still, let8217;s see how it translates into implementation. The declaration of intent has been positive in the direction that it should go. The shortfalls have been in terms of the quantum of allocations, but we hope that all the proposals will be carried forward with sincerity.

The writer is a CPIM politburo member