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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
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N A T I O N

Economic survey calls for shift from MSP
Food subsidies a heavy burden

New Delhi, July 7
Underlining the need for a shift from the minimum support price (MSP) system and developing alternative products markets, the 2003-04 pre-budget economic survey stressed this was essential for crop diversification and broadbased agricultural development.

Economic survey draws attention to poor healthcare
New Delhi, July 7
The Economic Survey 2003-’04 holds a mirror to the imbalances in the healthcare delivery system in the country.

Army chief Gen N.C. Vij meets the members of the Army Parachute Regiment at the flagging-off ceremony of a mountaineering expedition in New Delhi Army chief Gen N.C. Vij meets the members of the Army Parachute Regiment at the flagging-off ceremony of a mountaineering expedition in New Delhi on Wednesday.
— PTI


 

EARLIER STORIES

 

Reformulate anti-poverty strategy
New Delhi, July 7
Questioning the efficacy of various poverty alleviation programmes, the pre-Budget Economic Survey has suggested that the country should reformulate anti-poverty strategy, which is fiscally sustainable and more finely targeted to those who cannot benefit from opportunities offered by growth.

Lack of funds hampering villages’ road project
New Delhi, July 7
The pre-Budget Economic Survey presented in Parliament today is quite mum over the future of major rural infrastructure programme — Pradhan Mantri Grameen Sadak Yojana — which aims to provide road connectivity to about 1.6 lakh rural unconnected villages by the end of Tenth Plan period (2002-07).

Chief of Naval Staff Admiral Madhvendra Singh addresses a gathering at the commissioning ceremony of INS Betwa
Chief of Naval Staff Admiral Madhvendra Singh addresses a gathering at the commissioning ceremony of INS Betwa, Navy's latest guided missile frigate, in Kolkata Wednesday. — PTI

Need to streamline food security system: survey
New Delhi, July 7
The sustainability and serious threat posed to the food security system because of ever increasing food subsidy, which was a staggering Rs 25,160 crore in 2003-04, needs to be addressed expeditiously. “There is need to address the issues adversely affecting the efficacy of the food security system,” according to the 2003-04 economic survey tabled in Parliament today.

National Advisory Council meeting on July 17
New Delhi, July 7
The Sonia Gandhi-led National Advisory Council (NAC), set up to monitor the implementation of the UPA government’s Common Minimum Programme (CMP), is to hold its first meeting on July 17.

Association demands abolition of dividend tax
New Delhi, July 7
The All India Tax Payers’ Association (AITPA) has demanded the complete abolition of the dividend tax, charged at the hands of recipients, as provided in the last Budget by the NDA government, claiming that it was resulting in accumulation of wealth in the hands of the individual promoters of companies and at the cost of the common good.

Sonia meets Amarinder, Bhattal
New Delhi, July 7
The Punjab Chief Minister, Capt Amarinder Singh, was summoned to the Capital today by the Congress Central leadership amid reports of resentment among some MLAs and ministers over the downsizing and reconstitution of the ministry.

RJD for probe into ex-minister’s links with Telgi
New Delhi, July 7
The Rashtriya Janata Dal (RJD) member, Mr D P Yadav, today demanded in the Lok Sabha an inquiry by a Joint Parliamentary Committee (JPC) into the alleged links of a prominent former NDA minister with the stamp paper scam accused Abdul Karim Telgi.

Railways take up new safety measures
New Delhi, July 7
The Indian Railways has planned the production of 65-78- metre- long rail for enhancing the safety of rail services in the current financial year 2004-’05.

Nirupama is envoy to Lanka
New Delhi, July 7
Ms Nirupama Rao, Additional Secretary in the Ministry of External Affairs, was today appointed as India’s next High Commissioner to Sri Lanka, MEA spokesman Navtej Sarna announced today. — TNS

Doval is IB Director
New Delhi, July 7
Mr Ajit Kumar Doval was today appointed as the next Director of Intelligence Bureau (IB), ending weeks of shadow-boxing within the country’s premier internal intelligence agency. — TNS


Videos

An exhibition of Rudraksh in Madurai.
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Economic survey calls for shift from MSP
Food subsidies a heavy burden
Tribune News Service

New Delhi, July 7
Underlining the need for a shift from the minimum support price (MSP) system and developing alternative products markets, the 2003-04 pre-budget economic survey stressed this was essential for crop diversification and broadbased agricultural development.

“A distinct bias in agricultural price support policies in favour of rice and wheat has distorted cropping pattern and input usage. The market for farm output continues to be subject to heavy procurement interventions,” the survey which was tabled in Parliament today observed.

Food management is inefficient with unsustainable level of food subsidies imposing a heavy burden on government finance. The rural economy and the private sector lack the basic infrastructure to build up sufficient buffer stocks and the country remains vulnerable to weather shocks.

Though the prospects of agricultural production in 2004-2005 are considered bright because of the forecast of a favourable monsoon, the survey regretted that agriculture has not received as much attention as other sectors in services and manufacturing.

Emerging areas in agriculture like horticulture, floriculture, organic farming, genetic engineering, food processing, branding and packaging have high potentials of growth.

“The development of rural infrastructure, rural extension services, agro-based and food processing industries are essential for generating employment and reducing poverty," the survey said.

Noting that agriculture suffers from a mismatch of food crops and cash crops, the survey pointed out the volatility in production and wide disparities of productivity in regions. The domestic production of pulses and oilseeds are still below the domestic requirements.

The survey said considerable emphasis has been given to development of horticulture and floriculture through the creation of critical infrastructure for cold storage, refrigerated transportation, processing, packaging and quality control. The improvement of cold storage and marketing and export networks are necessary to optimise the production and export potential of fruits, vegetables, milk, eggs, groundnut, black pepper and cashewnuts.

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Economic survey draws attention to poor healthcare
Tribune News Service

New Delhi, July 7
The Economic Survey 2003-’04 holds a mirror to the imbalances in the healthcare delivery system in the country.

According to the survey, the system has created a paradoxical situation ``with a plethora of hospitals, but a few located in areas with high morbidity.’’

The report draws attention to inappropriate manpower, diagnostic and therapeutic services and drugs in hospitals in the public, voluntary and private sectors.

``Overcrowding in some hospitals co-exists with under utilisation in others.’’

The Tenth Five-Year Plan (2002-’07) seeks to address these imbalances by focussing on reorganisation and restructuring of the existing healthcare infrastructure at primary, secondary and tertiary levels.

The survey has stressed on the need for greater investment in health to maintain the current health situation as the technology required for tackling resistant infections and non-communicable diseases are expensive and result in escalation of health-care costs.

The survey has projected that India accounts for 10 per cent of the global AIDS burden. ``As compared to 3.5 million in 1998, an estimated 4.5 million men, women and children were living with HIV/AIDS in the country at the end of 2002, with an adult (15-49 years) prevalence rate of 0.8 per cent. These figures are a cause of increasing concern as persons infected with HIV will progress to AIDS, resulting in a steep increase in number of AIDS patients in the country with consequent medical, economic and social implications,’’ the survey has warned.

The economic survey has warned that population control is an important challenge before the nation. ``India supports about 16 per cent of world population. According to the United Nations Population Fund (UNFPA) estimates, out of an annual increase of 76 million in world population, India alone accounts for as much as 16 million, marking a sizeable (21 per cent) contribution. With the risk of achieving the dubious distinction of becoming the most populous country in the world by about 2050, designing appropriate and effective steps to address the problem of population growth is an important challenge facing the nation.’’

Relying on the 2001 Population Census of India figures, the survey states that the population of India in March, 2001, was 1,027 million. The survey states that India is following the demographic transition pattern of all developing countries from initial levels of ``high birth and high-death rate’’ phase to the intermediate stage of ``high birth rate-low death rate’’ with high rates of population growth, before graduating to the ``low birth rate-low death rate’’ phase. "Over the past two decades, while the crude birth rate declined from 33.9 per thousand persons in 1981 to 25 per thousand persons in 2002, the crude death rate also declined from 12.5 per thousand persons in 1981 to 8.1 per thousand persons in 2002.’’

The survey states that the 2045 target for population stabilisation can be met only when child survival, maternal health and contraception issues are addressed.

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Reformulate anti-poverty strategy
Tribune News Service

New Delhi, July 7
Questioning the efficacy of various poverty alleviation programmes, the pre-Budget Economic Survey has suggested that the country should reformulate anti-poverty strategy, which is fiscally sustainable and more finely targeted to those who cannot benefit from opportunities offered by growth.

The survey said most evaluations had found that poverty reduction programmes were not very effective. “They suffer from ill-defined and multiple objectives, limited targets, under funding, high administrative costs and lack of proper accountability,” it said.

Quoting a study on the Public Distribution System, the survey said only 25 per cent of food grains actually reached the poorest 40 per cent of the population and administrative costs accounting 85 per cent of the total expenditure far outweighed the income gains to the poor.

Referring to studies on poverty alleviation, the survey said though growth in per capita income was a necessary condition for poverty reduction, it was by no means sufficient. The survey favoured creation of an enabling environment for the poor to participate in and benefit from the growth process.

It said the Integrated Child Development Services and Food for Work programmes were better-targeted programmes and more successful at targeting the poor and improving their living standards at a relatively low cost.

In the education sector, it said there was a case for greater cost recovery but “political economy constraints may go against enhancement of user charges.”

Favouring development of agro-based and rural resource-based enterprises, the survey said that non-farm employment in rural areas had not grown much and could not absorb the growing labour force.

The survey said though the impact of development strategy of the last two decades on social sector indicated significant improvements, there was a need to accelerate improvements in the quality of life and human well being through enhanced availability of public services and development of economic and social opportunities.

“The need for rapid improvement in the social sector is manifest from India’s rank of 127 among 175 countries in terms of the UNDP Human Development Index (HDI).”

The survey said plan and non-plan expenditure of the Centre for social services had more than doubled from Rs 11,631 crore in 1995-96 to Rs 35,478 crore in 2003-04. It said social sector programmes required focused action at the state level.

Citing latest estimates of poverty by the Planning Commission, it said in the past two decades there had been a significant decline in proportion of people living below the poverty line from 51.3 per cent in 1977-78 to 26.1 per cent in 1999-2000. In absolute terms, the number of the poor declined from 328.9 million in 1977-78 to 260.3 million in 1999-2000.

The survey said in 1999-2000, Bihar and Orissa continued to be the two poorest states and 20 states and union territories had poverty ratios below the national average.

It said the Tenth Plan (2002-07) had set a target of reduction in the poverty ratio by five percentage points to 19.3 per cent by 2007 and by 15 percentage points by 2012. The targets for rural and urban poverty in 2007 were 21.1 per cent and 15.1 per cent, respectively.

The survey said objectives set for the rural water supply in the National Agenda for Governance (NAG) envisaged the provision of safe drinking water to all rural habitations by 2004.

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Lack of funds hampering villages’ road project
Manoj Kumar
Tribune News Service

New Delhi, July 7
The pre-Budget Economic Survey presented in Parliament today is quite mum over the future of major rural infrastructure programme — Pradhan Mantri Grameen Sadak Yojana — which aims to provide road connectivity to about 1.6 lakh rural unconnected villages by the end of Tenth Plan period (2002-07).

Though it claims that although initial estimates of the project has increased from Rs 60,000 crore to Rs 1,32,000 crore, yet it is silent on how the government would implement this mega programme during the remaining period of the tenth plan.

The economic survey points out that since the inception of the programme, project proposals for Rs 14,417 crore have been cleared and about 88,685 km of rural roads benefiting about 30,269 villages have been taken under the programme.

However, the survey claims, “Of these, 20,740 road works have been completed till March, 2004, and an expenditure of over Rs 6,457 crore has been incurred.” The critics point out that the survey is silent how the Central government will arrange “funding over Rs 1,00,000 crore by 2007.”

Recently, Mr Raghuvansh Prashad Singh, Union Minister of Rural Development, speaking at the Chief Ministers’ Conference on Panchayat Raj and Poverty Alleviation had wondered,” How could the government implement this scheme, when the annual Budget of his ministry was less than Rs 17,000 crore.”

The National Rural Roads Development Agency (NRRDA) is providing operations and management support to the project. Unlike the Golden Quadrilateral road project, that has shown reasonable success, the road project connecting villages has so far remained on paper due to the lack of “funding mechanism and support from the Central Government,” claimed sources in the Ministry of Rural Development.

Regarding the Rs 54,000-crore National Highway Project, that will cover 13,146 km of the National Highways, the survey says, “About Rs 10,000 crore has been spent on this project. Owing to the delays of the project construction, the full economic impact of these projects are yet to come.”

The survey points out Asian Development Bank (ADB) has agreed to support the development of rural roads in Madhya Pradesh and Chhattisgarh through a loan of $ 400 million to finance projects worth $ 571 million.

The survey adds that since the government has failed to arrange adequate funds, the states of Assam, Orissa and West Bengal have been identified for the second tranche of ADB assistance. The Life Insurance Corporation of India (LIC) has also agreed to fund Rs 10,000 crore worth projects in addition to funds from the World Bank.

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Need to streamline food security system: survey
Tribune News Service

New Delhi, July 7
The sustainability and serious threat posed to the food security system because of ever increasing food subsidy, which was a staggering Rs 25,160 crore in 2003-04, needs to be addressed expeditiously.

“There is need to address the issues adversely affecting the efficacy of the food security system,” according to the 2003-04 economic survey tabled in Parliament today.

Emphasising that the remarkable price stability of food grains despite the poor monsoon in 2002 has demonstrated the relevance of the food security system, the survey said that the fixation of MSP had to bear a distinct relationship to the cost of production.

The economic cost of food grains to the FCI due to various factors, including management inefficiency and centralised system of procurement and distribution has to be addressed expeditiously.

The survey said that there had to be restraint in hiking the MSP of food grains till it equalled the cost of production of the least cost state. The reservation of the states in adopting decentralised procurement had to be addressed to persuade them to adopt this cost effective system.

Further, there has to be rationalisation of the existing high level of state levies in food grains.

On inflation, the survey said that it would remain around 5 per cent in 2004-05 as projected by the Reserve Bank of India barring the uncertainties of movement of international prices of petro products.

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National Advisory Council meeting on July 17
Anita Katyal
Tribune News Service

New Delhi, July 7
The Sonia Gandhi-led National Advisory Council (NAC), set up to monitor the implementation of the UPA government’s Common Minimum Programme (CMP), is to hold its first meeting on July 17.

Disclosing this in an informal chat in Parliament House today, Congress President Sonia Gandhi told TNS that the panel’s first meeting may be held at its new address, 2, Motilal Nehru Place, if the place is ready by then. Otherwise, the deliberations will take place at her residence, she said. The chosen building is under renovation at present.

The NAC’s July 17 meeting may just set the ground rules for future discussions, but the council’s functioning will come under the scanner as the Opposition has already billed it as an “alternate power centre.”

The Congress, however, has repeatedly maintained that the NAC is a government body, headed by Sonia Gandhi, whose primary function is to oversee the CMP’s implementation and also provide the necessary feedback and inputs as and when necessary.

A host of social activists and experts, including Jean Dreze, Mirai Chatterjee, Shiv Kumar, Jayaprakash Narayan and Aruna Roy, have been named on this advisory panel. Given the composition of the team and the priorities spelt out in the CMP, the NAC is expected to focus on the areas of health, education, agriculture and employment.

Since the NAC’s constitution has generated considerable interest, Ms. Gandhi specially referred to it in her address at the new Lok Sabha’s first meeting of the Congress Parliamentary Party (CPP) today.

Stating that as its chairperson, she will devote considerable time to the NAC, Ms. Gandhi said “the council is expected to increase public awareness of the CMP and will be our interface with civil society.”

The Congress President said the council will also provide a mechanism through which the government will get regular feedback on the implementation of the CMP’s commitments and the impact they are having.

“The council will work closely with the government to ensure that whatever we have pledged in the CMP becomes a reality,” Ms Gandhi told the CPP.

That the CMP is be the new Congress party’s Bible was evident from Ms. Gandhi’s address who described the document as a detailed statement of the new government’s priorities, plans, policies and social programmes. She exhorted the MPs to work closely with their colleagues in the government to ensure that the CMP is put into practice in both letter and spirit.

Ms Gandhi, who was flanked by Prime Minister Manmohan Singh and Defence Minister Pranab Mukherjee at the CPP meeting, also referred to the upcoming assembly elections in Haryana, Bihar, Jharkhand and Arunachal Pradesh, slating that the party organisation will gear itself to consolidate on its success in the Lok Sabha poll. She also promised to pay special attention to the party organisation in states where the Congress performed poorly in the recent general elections.
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Association demands abolition of dividend tax
Legal Correspondent

New Delhi, July 7
The All India Tax Payers’ Association (AITPA) has demanded the complete abolition of the dividend tax, charged at the hands of recipients, as provided in the last Budget by the NDA government, claiming that it was resulting in accumulation of wealth in the hands of the individual promoters of companies and at the cost of the common good.

Describing such a policy completely as “class based”, the Legal Cell of the AITPA in a representation to the Finance Minister, Mr P Chidamabaram, said in the last Budget under the dividend tax scheme, on the one hand, it even proposed to tax productivity award while on the other, it exempted promoters of companies from tax earned through dividend declared by them for transferring reserves of their companies to their individual accounts.

The AITPA’s legal consultant Ravi Prakash Gupta said, “This dichotomy in tax proposals raises doubts over the bona fides of such actions of the state... because if a company is taxed, it does not mean that its individual promoters will not be taxed.”

Under the scheme, an employee of a company does not need to pay tax if the company was paying tax on its income. Moreover, only 12 per cent tax was suffered by a company in declaration of dividend. “Thus, the promoters of a company could easily transfer its reserves to their individual accounts by paying 12 per cent tax only,” he said.

If this practice was allowed to continue, more and more companies would be declaring dividend so as to benefit the controlling management, which would get tax free income to the extent of its share of the capital, Mr Gupta said adding, “This would accumulate income in crores of rupees at the hands of industrialists and result in the fall of tax collection.”

The AITPA alleged that the dividend tax had been exempted “under pressure” from the industrialists’ lobby by the NDA government.

Mr Gupta said there was no rationale behind granting such an exemption “It fails to appreciate that corporate taxes are imposed upon a company which is a separate entity, while, dividend tax is imposed upon the individual at the hands of the recipient that adds to his personal income,” he said.

It would not only be hit by the Article 14 of the Constitution for treating “unequals as equals” but would also be against the spirit of the Article 39(b) and (c) which commands the state to direct its economic policy in a manner that it was not detrimental to the common good and allows concentration of wealth in the hands of the rich class,” the AITPA said.

Allowing the concentration of wealth in the hands of a few individual goes against the concept of “socialism”, embedded in the “preamble” of the Constitution, Mr Gupta said, reminding the Finance Minister that even in the liberal economy like the USA “there is no exemption from the dividend tax.”

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Sonia meets Amarinder, Bhattal
Tribune News Service

New Delhi, July 7
The Punjab Chief Minister, Capt Amarinder Singh, was summoned to the Capital today by the Congress Central leadership amid reports of resentment among some MLAs and ministers over the downsizing and reconstitution of the ministry. Deputy Chief Minister Rajinder Kaur Bhattal met Congress President Sonia Gandhi following reports that she was to be divested of the post of Deputy Chief Minister. Several other former ministers, who were dropped in the downsizing exercise, also met Ms Gandhi in Parliament. They told Ms Gandhi that no formula had been adopted in downsizing and a policy of “pick and choose” had been adopted.

Capt Amarinder Singh rushed to the Capital for consultations with the Central leadership over ways to contain resentment among the MLAs. 

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RJD for probe into ex-minister’s links with Telgi
Tribune News Service

New Delhi, July 7
The Rashtriya Janata Dal (RJD) member, Mr D P Yadav, today demanded in the Lok Sabha an inquiry by a Joint Parliamentary Committee (JPC) into the alleged links of a prominent former NDA minister with the stamp paper scam accused Abdul Karim Telgi.

The RJD members flashed a newspaper photograph during the zero hour showing the former minister sitting with Telgi, Anil Gote and a former Maharashtra Chief Minister.

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Railways take up new safety measures
Tribune News Service

New Delhi, July 7
The Indian Railways has planned the production of 65-78- metre- long rail for enhancing the safety of rail services in the current financial year 2004-’05.

According to a statement issued by the Railway Ministry here today, the long rail will be welded in Bhilai Steel Plant for making a rail panel of 24-260 metre. These rail panels will be transported directly to the site.

The manufacturing of 26 metre long rails had started in Bhilai Steel Plant in 2001-’02. The Railways procured about 1.5 lakh million tonnes of 26 metre rail during 2003-’04.

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BRIEFLY

Prof Chandra National Book Trust chief
NEW DELHI: Prof Bipin Chandra, a noted historian, was on Wednesday appointed Chairman of the National Book Trust (NBT) to take the place of a person appointed by former HRD Minister Murli Manohar Joshi. Professor Chandra replaces B.K. Sharma, who had retired as Additional Secretary from the Ministry of Law and Justice. — PTI

Dasgupta wins Cinefan award
NEW DELHI:
Film historian Chidananda Dasgupta has been chosen for the first Cinefan Lifetime Achievement Award for Best Writing on Cinema. Dasgupta, one of the founding fathers of the film society movement in the country along with Satyajit Ray, will receive the award during the 6th Asian Festival of Cinema to be held here from July 16. — UNI

Goods train derails
AKOLA (MAHA): Rail traffic on Mumbai-Kolkata route on Central Railway was totally disrupted following derailment of 12 wagons of a Mumbai-bound goods train at Dabki Road railway gate, 3 km from here, in the wee hours of Wednesday. However, there was no loss of life or injury due to the mishap that occurred around 4.30 am. — PTI
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