FM promises to hike standard deduction, IT
 exemption limit

New Delhi, February 3
Finance Minister Jaswant Singh today averred that his government was committed to enhancing the standard deduction and the exemption limit but said this required an amendment to the Income Tax Act.

“I have clearly spelt out in my Interim Budget speech what is possible and what is not,” Mr Jaswant Singh told UNI in an interview here.

Mr Jaswant Singh said there was a case for revisiting the present exemption limits and realigning them appropriately.

When asked there was criticism that he had presented an election Budget wooing the middle class and the farming community but relegating the reform measures, Mr Jaswant Singh said “which is not an election Budget? I think the criticism is unfortunate.”

He also referred to the decision to merge DA to the extent of 50 per cent of the basic pay, saying that this was required as there had been erosion in their incomes.

The Finance Minister said 60 per cent of the wage bill of the government went towards pensioners. There had been a hue and cry that in view of the continuous lowering of interest rates their real incomes had been adversely affected. The decisions announced in the Budget would go a long way in ameliorating their condition.

When it was pointed out that Defence Minister George Fernandes had pleaded for a higher outlay, Mr Jaswant Singh said he had enhanced the allocation for the defence sector from Rs 60,300 crore to Rs 66,000 crore, besides providing for Rs 25,000 crore for establishing a non-lapsable defence modernisation fund, operational from the new financial year. The Finance Minister said the fiscal deficit for the current fiscal has been pegged at a lower level of 4.8 per cent of the GDP due to several reasons, including improved governmental management of finances. The improved fiscal deficit was on account of higher GDP growth, higher growth of tax revenues by more than 17 per cent, larger non-tax receipts and lower outgo on subsidies on food fertilisers and petroleum. — UNI


MEA discretionary expenditure up
Tribune News Service

New Delhi, February 3
The Vajpayee government has stepped up discretionary expenditure of the Ministry of External Affairs by Rs 16.49 crore.

The expenditure Budget document, presented by Union Finance Minister Jaswant Singh today in the Lok Sabha, reveals that special diplomatic expenditure, which takes care of discretionary spendings, has been pegged at Rs 841.01 crore in comparison to Rs 824.52 crore shown in revised estimates of 2003-2004.

The ministry has been allocated a budget of Rs 3,497.69 crore which is higher by Rs 87.69 crore compared to last year.

Another significant feature of the vote-on-account is that the government has proposed to scale down the technical and economic cooperation and advances to foreign governments.

Under this head, India had earmarked Rs 40 crore for Bangladesh for 2003-04 but revised estimates showed that only Rs 22 crore were spent. A sum of Rs 4.92 crore has been earmarked for 2004-05 in the vote-on-account.

Bhutan, which was given Rs 892.00 crore in 2003-04, has been earmarked Rs 969.80 crore. In view of the counter-insurgency operations this year, the planned expenditure had been revised from Rs 650 crore to Rs 760 crore. In the interim Budget, planned expenditure for Bhutan have been kept at Rs 725.00 crore.

While the budget for Nepal and Sri Lanka has been reduced, the government has kept expenditure for Maldives constant and has stepped up the budget for Myanmar by Rs 1 crore.

Following the trend of the current year, aid to African countries has gone up considerably. While in the 2003-2004 Budget, Rs 9 crore was earmarked for aid to Africa, the government ended up giving Rs 60.01 crore as aid this time. The vote-on-account has made a provision of Rs 64.64 crore under this head.Back


2 crore Central employees to benefit
Gaurav Choudhury
Tribune News Service

New Delhi, February 3
The merger of the 50 per cent Dearness Allowance with the Basic Salary of the Central Government employees, as announced by Finance Minister Jaswant Singh could have major financial implications.

While about 4 million Central Government employees would benefit directly from such a move — it is estimated that increase in monthly salaries of Central government employees would be between Rs 1500 and Rs 2500 — the financial implications from a macroeconomic prism is of immense significance.

BJP Parliamentary spokesperson V K Malhotra told The Tribune that about two crore employees of the Central government and Central government-run schools, colleges and CPSUs would directly benefit from this decision.

Experts opine, that the state governments are likely to feel the pinch as they would be under political pressure to follow suit.

Consequently, this will act as a major drain on the resources of the state governments, which are already in a very precarious position.

Economists are of the opinion that even though the Central fiscal deficit has been scaled down below 5 per cent, the combined fiscal deficit of states and the Centre would be difficult to reign in.

Finance Ministry officials have maintained that the measure will not have a major impact on the expenditure front, as it will be offset by higher tax collections, the same argument cannot be applied for state governments as Income Tax is a Central levy.

Experts have opined that only recently, the government recovered from the fiscal shock from the largesse doled out by implementing the Fifth Pay Commission recommendations.

However, this time around the decision would be implemented prospectively from April 1, 2004 and will not entail any payment of arrears as was the case earlier.Back


It’s pro-rich: Oppn
Tribune News Service

New Delhi, February 3
The political parties stuck to their traditional stance as they reacted to the sops in the interim Budget presented by the Union Finance Minister Jaswant Singh today.

While the Congress termed it as a “poll gimmick”, the ruling BJP said the Budget proposal would further boost the “feel-good” factor.

“The Budget has proved to be an anti-climax as it does not contain anything for the poor. There is nothing for farmers and the unemployed. It was all the more disappointing as people had expected a rise in IT exemption limit,” Congress spokesman S. Jaipal Reddy said. BJP spokesman Vijay Kumar Malhotra said the budget was an example of “India Shining” and added it would boost the feel-good factor. BSP leader Rashid Alvi said the Budget was aimed at misleading voters and feared that it would only increase the deficit in the next budget.

RJD leader Laloo Prasad Yadav said the Budget had been drafted keeping the Lok Sabha elections in mind as the ruling coalition at the Centre was panicky that it might not return to power. “That is why it is doling out lollypops to woo voters,” he said.

The Opposition parties apprehended that so many populist measures announced in the vote-on-account would only result in increasing the deficit in the next Budget.

The Left parties dubbed it an “election Budget,” saying that the whole exercise was aimed at wooing the middle class and zamindars.

The Left said the Budget had ignored the interests of a huge number of unemployed people, poor peasants, landless labourers and the sick industry.

The CPM, the CPI and the CPI (M-L) also questioned the government about the revenue sources for funding various new schemes it had announced. The general secretary of CPM, Mr H.S. Surjeet, CPI national secretary D. Raja and CPI(M-L) central committee member Sapan Mukherjee said the NDA government was not only spending huge amounts on media advertisements for its “campaigning’’ but also using the institution of Parliament for the same. ‘’There was no provision for interim Budget in the Constitution,’’ they said.

Mr Surjeet said the government had not even mentioned a single word on ways to deal with the burgeoning unemployment, plight of the poor peasants and other weaker sections. “The Budget holds no hope for the poor,’’ he said.

Mr Raja said the vote-on-account included election-oriented announcements only to hoodwink people. “Even before the interim Budget the government announced many sops in similar instalments”, he said.’’ “There was no debate in Parliament. The announcements relate to the expenditure side and not revenue,” he said, adding that the vote-on-account announcements reflected the government’s “commitment’’ to MNCs, globalisation, middle class and the big “talukas”.


Presentation of Budget delayed

New Delhi, February 3
The presentation of the interim Budget by Finance Minister Jaswant Singh in the Lok Sabha today was delayed due to a procedural wrangle as the Opposition maintained that there was no provision for such a budget in the Constitution.

As soon as the Finance Minister was called by Speaker Manohar Joshi to present the interim Budget, Congress chief whip Priya Ranjan Dasmunshi raised a point of order as to whether it was proper to present an interim Budget.

Several other members also raised this objection.

Parliamentary Affairs Minister Sushma Swaraj intervened and said that several times in the past different governments had presented an interim Budget.

The heated arguments were continuing even 55 minutes after the scheduled time for the presentation of the interim Budget.

However, the Speaker, quoting earlier precedents, justified the government’s action, saying that “this session can be treated as the second part of the winter session of Parliament”.

Even as Parliamentary Affairs Minister Sushma Swaraj and Law Minister Arun Jaitley sought to justify the convening of the session, former Prime Minister Chandra Shekhar came out strongly in support of CPM leader Somnath Chatterjee, saying that “parliamentary democracy cannot be run on falsehoods and distorting of the Constitution and bypassing it”.

Mr Chandra Shekhar’s stinging remarks came after Ms Swaraj said the Speaker could give a ruling “without hesitation that this was not the first session of the current year” amidst strong protests from the Opposition benches that she cannot “direct” the Chair.

The ministers sought to defend the government stand by quoting the precedents of 1962-63 when the House was adjourned on December 11, 1962, and re-convened on January 21, 1963. To this, the Congress members pointed out that it was an “extraordinary situation” as it took place due to the Sino-Indian war and asked “what is the emergency now”.

Quoting parliamentary rules, Mr Chatterjee repeatedly demanded to know whether this was the first session of the new year. If it was, then the Presidential Address was mandatory.

He quoted a Calcutta High Court judgement, saying that if there was no Presidential Address, then the entire proceedings could be held “illegal and invalid”.

Congress MP Shivraj Patil cautioned the Chair that he should be careful before giving his ruling as it would set a precedent, binding on the House forever.

Taking all members’ viewpoints into consideration, Mr Joshi held the points of order moved by Mr Dasmunshi, Mr Chatterjee and others as “out of order” and quoted earlier precedents to justify the government’s decision to convene the House to approve the interim Budget. — PTI


Allocation for police bodies hiked
Tribune News Service

New Delhi, February 3
In the interim Budget for 2004-05 presented by Union Finance Minister Jaswant Singh in the Lok Sabha today, the Home Ministry’s overall budgetary allocation for Central Police Organisations (CPOs), including the Delhi police, has been increased by 16.11 per cent.

A considerable hike has also been made in the allocation for Indo-Bangladesh Border Works from Rs 201.68 crore (revised estimates) in 2003-04 to Rs 441.08 crore for 2004-05.

However, only a marginal hike has been made in the allocation for construction of residential accommodation for the police.

As against an allocation of Rs 327.30 crore in 2003-04, Rs 423.20 crore has been set aside for the fiscal 2004-05.

For the Indo-Pak border fencing, the Centre has decided to increase the allocation to Rs 196.75 crore for 2004-05 as compared to the revised budgetary allocation of Rs 130.06 crore in the current fiscal.

Among the CPOs, the BSF, which has been entrusted with the task of manning the entire eastern borders, has been allocated maximum funds, followed by the CRPF, which would soon be solely handling counter-insurgency and internal security jobs.

While the allocation for the BSF has been increased by Rs 469.27 crore, the CRPF has got an increased allocation of Rs 410.50 crore.


Save for rainy day, says PM
Tribune News Service

New Delhi, February 3
Prime Minister Atal Bihari Vajpayee today said that the Interim Budget would help India achieve a developed nation status by 2020 and advised the Central Government employees, who would be benefited by the merger of DA with the basic pay, to save the additional money for future.

“The Budget has addressed the concern of poor farmers, middle class and other sections of society,” Mr Vajpayee told reporters here.

“It has vindicated that the economic situation is improving and the government has introduced various measures in this connection,” he said.

“I am confident that this Budget will help in meeting the targets of all sections of society, besides facilitating the achievement of future targets,” he said, adding that the measures taken for farmers and other sections of society would help in encouraging the farm sector.

The Prime Minister said he was confident that the second Green Revolution would move forward successfully.

On the proposal to merge 50 per cent of the DA with the basic pay of Central Government employees, he said: “The government employees will welcome this step, but I will appeal to workers not to spend the additional money they will get and save for the future.”

“We have two major objectives, namely strengthening the country’s security and providing food security”, he said, adding that the scheme prepared in this direction would lead to greater security and food security.

“It is a big thing for a poor man to get wheat at Rs 2 per kg and rice at Rs 3 per kg”, the Prime Minister said. The government had instructed state governments to implement the food-for-work programme more speedily.


25,000-cr defence fund set up
Tribune News Service

New Delhi, February 3
In a boost to the defence sector, the government today took a significant step by setting up a non-lapsable defence modernisation fund of Rs 25,000 crore which will go a long way in the modernisation of the armed forces.

“Adequate and committed availability of funds for defence modernisation and weapons system acquisition needs a satisfactory resolution,” Finance Minister Jaswant Singh said announcing that the fund would be revolving one for three years and would be made available from April 1. 

In the proposals announced for 2004-05 in the interim Budget in the Lok Sabha, the government hiked the defence Budget by Rs 6,300 crore to a whopping Rs 66,600 crore, a raise of almost 9.45 per cent against last year’s revised estimates of Rs 60,300 crore.

But even with the massive hike of over Rs 6,300 crore India’s defence spending would still be 2.12 per cent of the GDP, far less than China which has staggering defence spending of 6 per cent of the GDP and Pakistan 4 per cent. 


Rs 1,150 cr set aside for poll expenses
Tribune News Service

New Delhi, February 3
In view of the coming general election, Finance Minister Jaswant Singh has made a provision of Rs 1,150 crore for meeting poll expenses in the interim Budget, which includes preparation of voter photo identity cards.

The Finance Minister has made a provision of Rs 818 crore for meeting the general election expenses, Rs 231 crore for the normal poll-related expenditure and Rs 100 crore for preparing voter identity cards.

Besides, Rs 11.50 crore has been allocated to the Election Commission to meet its routine expenses during the next four months of the financial year 2004-05.

The government plans to spend Rs 112 crore on improving the infrastructural facilities in judiciary during this period, which was up by Rs 22 crore as compared to current financial year’s budgetary proposals.

Mr Jaswant Singh has given special emphasis on improving the judicial facilities in the North-East by making a provision of Rs 140 crore to it, which is up by Rs 45 crore than the current year’s allocation.

The allocation for the Supreme Court has been placed at Rs 34.68 crore, which is high considering the entire expenditure for the apex court during the current financial year was only Rs 39.05 crore.


50 pc Central staff DA merged with basic pay

New Delhi, February 3
The government has decided to merge 50 per cent of the DA with the basic pay of the Central Government employees and this will come into effect from April 1 this year, Finance Minister Jaswant Singh announced in the Lok Sabha.

Presenting the interim Budget Mr Jaswant Singh said the DA was last increased from July 1, 2003. At present, the Central Government employees are getting 59 per cent of their pay as DA.

The Fifth Pay Commission had recommended that the DA should be merged with the basic pay whenever it exceeded 50 per cent of the pay and the Government, having re-examined this recommendation in depth, had decided for the merger. — PTI


GDP growth projected at over 7.5 pc

New Delhi, February 3
Finance Minister Jaswant Singh today projected a growth of 7.5 to 8 per cent for the current year in the face of strong economic fundamentals.

“Economic growth indices in the current year are very encouraging. With inflation at 4 to 4.5 per cent, this year we expect the growth rate of our GDP to be between 7.5 to 8 per cent, he said, presenting the interim Budget for 2004-05 in the Lok Sabha here.

Though there were higher growth estimates that had been made, for the present “we prefer to remain with the cited figures,” he said.

Noting that the foreign exchange reserves crossed $ 100 billion in mid-December, he said they continued to grow, liberating from the mentality of want.

Giving the budget estimates for 2004-05, he said the total expenditure was estimated at Rs 457,434 crore, of which Rs 135,071 crore was for plan and Rs 322,363 crore for non-Plan expenditure.

He said the revised estimates showed a net decrease in expenditure of Rs 11,143 crore as compared to the Budget estimates. This reduction had been achieved despite additional expenditure on rural development, Sarva Shiksha Abhiyan, Delhi Metro Rail Project and additional budgetary support for the Railways.

Net tax revenues for the Centre were estimated at Rs 187,539 crore as compared to an estimate of Rs 184,169 crore.

Non-tax revenue was estimated at Rs 75,488 crore, Rs 5,722 crore more than the estimated level of Rs 69,766 crore, he said, adding that disinvestment receipts, at Rs 14,500 crore, were also higher than the estimate of Rs 13,200 crore. — PTI


IT rates unchanged

New Delhi, February 3
Belying expectations, Finance Minister Jaswant Singh proposed no changes in the income tax structure in the interim Budget 2004-05 presented by him in the Lok Sabha today.

“Some necessary changes in the income tax procedures require the amendment of the Income Tax Act,” he said.

He said it was the government’s conviction and also a commitment that fiscal benefits available to new projects in the power sector should be extended up to 2012 instead of 2006 and fiscal benefits should also be available to cases of take-over from state electricity boards.

Outlining the mid-term perspectives on the direct tax front, the Finance Minister said the regime of listed equities on or after March 1, 2003, being exempt from long-term capital gains tax should be extended for a further period of three years. — PTI


Finance Bill introduced

New Delhi, February 3
Finance Minister Jaswant Singh introduced the Finance Bill, 2004, in the Lok Sabha today after presenting the Interim Budget and vote-on-account.

He also presented the supplementary demands for 2003-04.

The Finance Minister placed on the table of the Rajya Sabha a statement of estimated receipts and expenditure of the Central Government (annual financial statement) for 2004-05 and the vote-on-account.

As the House assembled after lunch, Mr Jaswant Singh also put forth a statement showing the supplementary demands for grants (general) for the year 2003-04 (February, 2004).

He was scheduled to table the interim Budget in the House at 12.30 p.m. but could not do so as its scheduled presentation in the Lok Sabha was delayed due to legal wrangling by the Opposition lasting 75 minutes. — PTI, UNI


AIIMS-level hospital for J&K
Tribune News Service

New Delhi, February 3
Finance Minister Jaswant Singh today said a medical college each in Jammu and Kashmir, Uttar Pradesh, Andhra Pradesh, Jharkhand, Tamil Nadu and West Bengal would be upgraded to the level of the All-India Institute of Medical Science (AIIMS).

Presenting the interim Budget, Mr Jaswant Singh said a hospital in the six states would be upgraded to the level of AIIMS as part of the Pradhanmantri Swasthya Suraksha Yojana. These hospitals would be in addition to the six new hospitals to be set up in the government sector on the pattern of AIIMS that were announced by Prime Minister Atal Bihari Vajpayee on the last Independence Day.

Mr Vajpayee had announced these hospitals for Bihar, Chhattisgarh, Madhya Pradesh, Orissa, Rajasthan and Uttaranchal under the same scheme.

Mr Jaswant Singh said the provision for both these schemes had been made in the Budget.


A lacklustre affair

New Delhi, February 3
With the Lok Sabha elections heavily on their mind, MPs of all hues were a subdued lot, making the presentation of the interim Budget, 2004-05, in the Lok Sabha today a lacklustre affair despite many sops.

Some members from both sides, including a few ministers, were seen having a cat nap while some others were yawning apparently aware of what was in store for them in the coming days — rough and tumble of electioneering preceded by the not-so-happy process of seeking renomination.

Members from the Treasury Benches were no exception as they thumped desks only for a few times in the hour-long exercise by the Finance Minister whose Budget speech was not laced by the usual citing of couplets and verses. There were hardly any interruptions or snide remarks by the Opposition except one when the Finance Minister announced the formation of a Rs 25,000 crore defence modernisation Fund. — PTI

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