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Left wish-list for the Budget |
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The Left parties have asked the Manmohan Singh Government to withdraw the tax exemptions for the corporate sector as a measure to mobilise resources. They have suggested a hike of Rs. 50,000 crore in the Budget so that commitments made in the Common Minimum Programme could be implemented. At a pre-budget meeting with Finance Minister P. Chidambaram in New Delhi on February 1, the Left parties said that allocation of Rs. 10,000 crore for employment generation, agriculture, education and health in the current year’s interim budget was grossly inadequate. They also suggested that the Defence outlay, which saw a hike of Rs. 12,000 crore in the interim budget, be brought down.
The Left parties disagreed with the move to set up a fund from disinvestment proceeds to make investments in the social sector. They were in favour of deficit financing since there was “significant unutilised capacity” in various sectors of the economy. They pointed out that the gross tax revenue of 9.21 per cent of the gross domestic product (GDP) in 2003-04 was low and suggested an increase of tax-GDP ratio by around 1.5 per cent. They said this would be sufficient to meet the additional development expenditure.
Congress president and chairperson of the National Advisory Council Sonia Gandhi has written a letter to the Prime Minister indicating the programmes she wants to be taken up in the Budget. She said that an additional Rs. 17,000 crore be allocated to finance some pet schemes listed in the common minimum programme. These include the Employment Guarantee Scheme, Sampooran Bal Yojna to provide supplementary nutrition to children, improvement of the road network in the north east and Sikkim, and a public health mission to cover the urban poor also. Sonia Gandhi has suggested a cess on cigarettes, alcohol, paan masala, gutka, and other intoxicants to bolster revenues.
The Left parties have decided to approach the UPA Chairperson Sonia Gandhi for her intervention to address their reservations against changes in the foreign direct investment (FDI) rules. Leaders of the Left parties met in New Delhi on February 3 to discuss the Manmohan Singh Government’s resolve to carry further the economic reforms charted out in the last Budget. They were of the view that there is a marked reluctance on the part of the Government to accept the Left viewpoint. The Left leaders said that the Government is taking the allies for granted and this would have to be addressed by the coalition leadership.
The Left parties as well as a section of the UPA Government are of the view that Sonia Gandhi will have to play the role of an arbiter as she alone has the political clout to settle differences. Although the Congress president is part of the consultation process, she has so far not intervened in economic policy decisions of the Government.
Refuting the claims of the Government that the Left had agreed to the FDI decision, Left party leaders said the announcements were made in the midst of consultations. “This goes against the spirit of the coalition. The Congress will have to observe the rules of the coalition,” Left leaders said.
In its letter to the Congress president, the Left is likely to register its protest against raising FDI in Indian private banks and merger of public sector banks.
The Left dubbed as “thoroughly mischievous” reports that the increase in the EPF interest rate was linked to the decision to raise FDI in telecom. “There has been no such deal,” CPI(M) politburo member Sitaram Yechury told reporters. The Left decided to organise an all India protest day on February 7 against the increase in the FDI cap in the telecom sector.
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