Memorandum on Union Budget 2006

The UPA Government came to poor raising high hopes among the people and produced a Common Minimum Programme (CMP) that promised balanced economic development in the country. The Finance Minister in his budget speeches in July’2004 and Feb.’2005 said that the Government has risen to the challenge and taking inspiration from the CMP was going to “bring immediate relief to the aam aadmi.” The Union Budget 2005-06 made a bold declaration that it was making an assault on “Poverty and Unemployment”. BJP regrets to note that the reality is otherwise. While in many cases, the schemes were the same schemes of the NDA Government with a change in nomenclature, in other cases, announcements were made in the Budget with little follow up on the ground in terms of implementation.

The BJP calls upon the UPA Government to address the following issues urgently with committed outlay of funds and time bound programme implementation

1. Employment and NRGS : Providing guaranteed employment for all was the core promise made by the UPA. However in the last one year we have found that while nothing has been done for generating urban employment, even in the rural sector, the National Rural Employment Guarantee Scheme- itself a rehash of the Food for Work Programme and several other programmes- has been delayed and introduced in a truncated form to cover just 200 districts during this year. Our estimate is that while the Union Budget had allocated Rs. 11,000 crores for NRGS, the actual expenditure has been far less and the additional allocation is in fact less than Rs 2000 crs. We call upon the UPA Government to address this issue in a forthright manner.

2. Education and Sarva Shiksha Abhiyan (SSA) : Sarva Shiksha Abhiyan was the brain child of the NDA government and we are happy that the UPA Government has recognized this as the “cornerstone of the Government’s intervention in basic education for all children.” The education cess has been levied for this purpose. Unfortunately, it is our submission that the expenditure on SSA and the coverage leave a lot to be desired and all that has happened is an extra tax burden. The focus has also shifted away from primary education.The UPA Government should publish a Status Report on SSA. We call for immediate action on SSA in the forthcoming Union Budget.

3. Bharat Nirman : Bharat Nirman was to build infrastructure to transform rural India. The goals set out for achievement by 2009 have remained far from realization and an amount of Rs 100,000 crores investment was promised. We demand a specific year by year road map in order that schemes like this will have some credibility.

4. Water Resources : While the NDA Government had envisioned a massive plan to interlink Indian rivers which would tackle holistically the problems of water resources and fund management, this was dropped by the UPA Government. A pilot project for limited restoration of water bodies was announced. We are not aware of the progress of this though the impact has been minimal. Level of investment in major and minor irrigation projects is also static. Since these investments in irrigation can give large returns in the short term and increase the acreage under cultivation we demand significant increase in allocations for water resources.

5. National Urban Renewal Mission : The Union Budget 2005 had recognized the rapid urbanization of the country and said ‘if our cities are not renewed, they will die’. National Urban Renewal Mission was designed to meet this challenge which would cover seven mega cities, all cities with a population of over a million, and some other towns. An outlay of Rs. 5,500 crores was made. It is well known that little has been done in this matter and leading environmentalists have doubted the seriousness of the Government in this regard. The BJP-NDA Government introduced and implemented a concept of urban poor. Free housing and free sanitation for the downtrodden, special provision for SC and ST, below poverty line people through Valimiki Avas Yojana and Nirmal Bharat Sanitation Project. Millions of people benefitted by the free housing constructed under these schemes in various cities, urban areas. A relief to the urban poor for Sanitation, Toilet Block. We call upon the UPA Government to tackle the problems of Urban India on a war footing with time bound implementation plans in this Budget.

6. Infrastructure : Recognising the importance of infrastructure, the Union Budget 2005 had announced a Special Purpose Vehicle to be set up for funding critical infrastructure projects. A borrowing limit of 10,000 crores was also stated. Sadly there is no progress in this critical area also and infrastructure in the form of power availability, ports, airports has deteriorated. We call upon the UPA Government to make specific provisions for this purpose and also make time bound commitments for their implementation in the Budget itself.

7. Agriculture

Its a matter of concern that while about 69% of the population depends on agriculture the sector contributes just 23 % to the GDP. The plan allocations for agriculture are miniscule and no capital investment is taking place in the sector. BJP regrets that scant attention is being paid to the problems of agriculture and demands

8. Housing

BJP-NDA Government gave boost and new direction to the concept of “Housing for All”. Easy and cheaper finance was made available to the middle class, lower middle class and labour class to have their own house. The housing loan interest rate was brought down from 15% to 7.0%. and Rs.1,00,000 crores disbursed during NDA regime. One crore families, i.e. five crores people have been benefited till now.

To sustain this momentum , BJP calls upon the UPA Government to

9 Tax Administration

The BJP is concerned at the enormous increase in tax burden that has taken place ever since the UPA Government assumed office. The scope of Service tax has been enlarged to an unprecedented extent and being a tax that is passed through this has hit the common man most. New taxes such as the Securities Transaction Tax, the Fringe Benefit Tax and Cash Withdrawal tax have been introduced. Promises of simplification of tax administration are a farce as amount of information to be provided and the number of forms and returns to be filed increases every year. We call upon the UPA Government to introduce a tax payer friendly environment where citizens need not feel harassed.

10 Taxation

The BJP calls for the following taxation measures:

11 Savings

While the Prime Minister has been talking of a Savings Rate in excess of 30% of GDP, successive budgets of the UPA have reduced savings incentives. Also incentives have been wrongly directed in many cases and have helped large business houses more than the common man.

The BJP calls for the following measures