Finance Minister P Chidambaram Monday indicated that this year's Budget would have special incentives for employment generating sectors besides the sectors with scope for significant value addition.
In his opening remarks during a pre-Budget meeting with industrialists, the finance minister named textiles as a fertile ground for employment generation. In this list, he also named chemicals, pharmaceuticals and automobile sector.
Among the "value addition" sectors, he listed metals, petroleum, information technology and food processing.
This unambiguous signal is in keeping with the United Progressive Alliance's common minimum programme as well as its pledge to pursue economic reforms with a human face.
Even while presenting last year's Budget, Chidambaram had clearly said the "the central theme that runs through the various schemes and programmes is creation of jobs."
This year's Budget thus promises to give more of that. The finance minister has also invited suggestions from the industry that could give a fillip to these sectors.
In his last Budget speech, Chidambaram had said that the food processing industry created 250,000 jobs annually at the current pace of growth. Similarly, the textile sector had the potential to create 12 million jobs over the next five years, while the information technology sector had an additional employment potential of 7 million by 2009.
During the annual session of the Society of Indian Automobile Manufacturers last September, Chidambaram had said that the government intended to re-examine the excise duty structure for small cars, which attracted 24 per cent duty, like alcohol.
Higher demand for automobiles and consequently more production is expected to have backward linkages with the auto component industry, which provides employment to a large section of people.
The government has already constituted a committee under C Rangarajan, chairman of the Prime Minister's Economic Advisory Council, to examine the pricing and tax structure for the petroleum sector.
While the chemicals and petrochemicals department is demanding that the excise rate on pharmaceuticals be halved to 8 per cent, the department of telecommunications is seeking sops for increasing broadband and computer penetration in the country.
Chidambaram said that though the industry had performed well and the Sensex had doubled, tax collection was equally important for the economy along with emphasis on employment creation.
Monday's meeting was attended by industrialists like Anil Dhirubhai Ambani Enterprises chief Anil Ambani, Videocon group Chairman VN Dhoot, Nicholas Piramal Director Swati Piramal, Nasscom President Kiran Karnik, Ranbaxy Laboratories President Malvinder Singh, Bharti group Chairman Sunil Mittal, Ficci Vice-President N Srinivasan and Secretary-General Amit Mitra, and Assocham President Anil Agarwal.
