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Budget could have been worse: Prakash Karat

Last updated on: March 01, 2005 00:52 IST

Prakash Karat, Politburo member of the Communist Party of India (Marxist), says that Finance Minister P Chidambaram's Budget 2005-06 has not enthused the Left parties at all.


CPI(M) Politburo member Prakash KaratOn behalf of the Left parties we had submitted a twelve-point memorandum to Finance Minister P Chidambaram. We also had a two-hour discussion with him and it was followed up by another discussion of the Left-United Progressive Alliance Coordination Committee.

In that exercise, we expressed our opinion on what direction the Budget should take. I think the discussions and debate that the UPA and Left entered into had some impact on the Budget.

Not total, but some impact is there.

We did not put any pressure on the Budget process, itself but we are seriously concerned about the economic policies of the government and Budget is just a small part of that.

Our stand has been that the government should reorient the policy keeping in mind the verdict of the last Lok Sabha election. We wanted change in the government's economic policy too.

In fact, Chidambaram started his Budget speech by saying that the verdict of Lok Sabha 2004 was for the new government and new economic policy. But so far we have seen few new policies.

Our point is that the previous government, led by the Bharatiya Janata Party, had neglected agriculture, rural development, health, social sector, education and employment generation.

We want more attention and more allocation for these sectors. We want a National Rural Employment Guarantee Act, a mid-day meal scheme and for education and health; we wanted a provision of Rs 50,000 crore as additional  Plan outlay. They haven't provided that.

Our first reaction to this Budget is that to an extent it addresses these needs and therefore it is in the right direction. That is a positive feature.

But the allocation falls far short of our expectations because it is less than Rs 25,000 crore.

We are not satisfied with allocation of Rs 11,000 crore for the national rural employment guarantee scheme. We wanted at least Rs 20,000 crore.

We are against FDI (foreign direct investment) in mining, pension funds and retail trade.

We believe that mineral resources should be under national control. The savings of poor and old people should not be given to foreign control. No way are we going to like that as ordinary Indian citizens can never fight against these foreign majors if something goes wrong.

Remember, we are still fighting against Union Carbide in the Bhopal gas tragedy case.

Retail trade should be protected from foreigners because their money will bring in large-scale unemployment. Small traders will be wiped out. The BJP government considered it but could not implement it for the same reasons.

Retail trade is one area where self-employment opportunity is there. Why trouble small traders?

In the mining sector, it is the duty of the government to find the resources to obtain the latest mining technology. We are very much against the direct foreign capital in mining industries.

We are also not sure how is black money menace is going to be curbed by the taxing of withdrawal of amount above Rs 10,000.

The tax revenue shortfall is about Rs 11,000 crore. The FM has reduced the corporate tax which was not necessary. The FM says that there will be more realisation of taxes. We are skeptical of that claim of his.

On the one hand, they are promising to increase the expenditure on a whole lot of sectors. Where will they get the money from? They say they will widen the tax net. I feel even then, certain service sectors could have been taxed more.

We believe that there was no need in a big jump in defence expenditure. Last year they had a big jump but then they said that they had some contractual obligations of the previous government to meet.

There is Rs 6,000 crore of net increase in defence budget. We were not in favour of any further increase. Defence budgets have become a sacred cow. Nobody is able to touch it. We have to rationalise our defence spending which is not debated enough. Even when the (aircraft carrier) Admiral Gorshkov was ordered we didn't debate enough.

The transparency is missing in our defence spending. We are not saying 'don't spend', but its usefulness and rationale are not debated enough. This is not due to jingoism but because of lack of transparency.

I will agree that Congress is also for liberalisation like the BJP was but because of that fact we are here to check them. That's why we are not sharing power. Our support is from outside. In this Budget certain issues are avoided to avoid the conflict, like divestment of public sector units.

The subject is taken out of the Budget. Whenever it comes up, we will oppose it.

On the subject of subsidies, we say that there are subsidies for the rich also. We want a full scale debate on this subject.

From the Left's point of view, the most satisfying aspect of this Budget is that there were certain aspects of the National Common Minimum Programme which needed to be implemented.

This Budget is trying half-heartedly at least to meet those expectations. A National Employment Generation Guarantee Act and the allocation of funds for health and education are such examples.

On the issue of taxing the rich, the Budget falls short. On issue of foreign institutional investors, the Reserve Bank Governor is voicing his concerns that this investment is coming for speculative purposes, but the FM has obviously not taken it as a matter of serious concern.

Lastly, if you think we look happy with the Budget, it is because we believed that it could have been worse!

- As told to Sheela Bhatt

Prakash Karat