Kerala hails forward trading in oils
D Jose in Thiruvananthapuram
Kerala responded cautiously to the Budget presented by Finance Minister Yashwant Sinha.
Two of Sinha's decisions -- the nod for forward trading in coconut oil and the concessions extended to non-resident Indians -- have turned out to be Kerala-friendly. They would benefit thousands of people directly and the economy indirectly.
Kerala's coconut growers are happy with the reintroduction of the forward trading which was suspended in 1971.
This will arrest the steady decline in the price of coconut over the past three years, affecting the state's rural economy which is closed linked with coconut. The crop occupies more than 45 per cent of the area in the state.
Equally well-received is the 100 per cent increase in the duty-free baggage allowance -- there has been a long-standing demand from the NRIs in the Gulf. So is the raising of the limit for secondary market investment by non-resident Indians.
The investment opportunity is considered significant in the light of slackness in the real estate business and industrial stagnation in the state.
The sops given to the small scale and information technology sectors are also of immense benefit to the state since they have been identified by the government as thrust areas for future growth.
The government had only recently announced an information technology policy to make Kerala an 'information society'.
As for the common man, he is happy that the Budget has spared him while striving to mop up additional resources. Many feel that the new orientation given to agriculture and social welfare will benefit them ultimately.
Indian Chamber of Commerce and Industry president G P Goyal said that the proposals on agriculture will strengthen the rural economy.
Ernakulam Chamber of Commerce president Sebastian Koluthara has appreciated the decision to simplify the direct and indirect taxes.
However, political circles and economic experts have been very critical of the Budget.
The hike in the petrol price and the increase in the railway fares will add to the inflationary pressure, said former Center for Development Studies president P K G Panickar. Terming it a revised version of the earlier P Chidambaram Budget, he expressed concern over the lack of measures to contain the fiscal deficit. This, he said, will cast a shadow on development work.
CDS fellow Dr Mohanan Pillai was worried that no measures were announced to end industrial recession which had set in last year. He could not find any rationale behind the move to privatise profit-making public sector units like Indian Oil Corporation.
Dr Pillai was also critical of the hike in customs duties. He said that the increase in the customs duties on commodities which enjoyed a competitive edge in the market will not yield any result.
Another CDS fellow Dr Kunjaman felt the privatisation of the insurance sector may lead to 'foreignisation' of the sector.
He said that the sops announced for the agriculture sector were part of the efforts to globalise farming, initiated by Sinha's predecessor P Chidambaram.
The ruling Left Democratic Front said the Budget will weaken the public sector undertakings.
A LDF spokesman said the proposal to bring down the duties on caprolactum will affect the public sector Fertilisers and Chemicals Travancore Limited.
The Congress-led United Democratic Front expressed concern over the lack of any steps to tide over the crisis fuelled by the sanctions. The UDF said the Budget will fuel inflation.
Budget '98
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