The National Executive Committee congratulates the National Democratic Alliance Government led by Shri Atal Bihari Vajpayee for maintaining plus six per cent annual growth rate in GDP inspite of certain setbacks -- such as irregular monsoon resulting in low agricultural growth, escalation in world petroleum prices etc. Still the government has been able to contain inflation rate at around four per cent in terms of consumer price index, comfortable food stock of over 45 million tonnes and foreign exchange reserves at over 38 billion dollars and over 20 per cent export growth rate. Poverty ratio has fallen from 36 per cent in 1993-94 to 26 per cent now. The ratio of external debt to GDP improved from 23.6 percent at the end of March 1999 to 20.7 percent at end September 2000.
However, of late, the agricultural sector has been facing problem of falling prices for agricultural goods -- mainly due to possibility of imports (though actual imports of agricultural goods has gone down except in case of soyabean oil and palmolein oil)--after removal of quantitative restrictions as per the commitment made to WTO. The party notes with satisfaction the government's timely step to protect farmers' interests by raising import duties on crucial agricultural products such as tea, coffee, copra and coconut (from 35% to 70%) crude edible oils (from 35% -50% to 75%), refined oil from (45%-65% to 85%), and crude palm oil (from 25% -55% to 75%)--in addition to protection already given since November 2000 to major cereals: wheat (50%), rice (70%-80%) and maize (50%). The Hon'ble Prime Minister has promised that the interests of the farmer will always be protected. The government should not hesitate to raise the customs duty further if need be.
For the first time the government has proposed concrete measurers to promote the agricultural sector from long term point of view. To mention a few, measures to set up agri-clinics where agricultural graduates could provide consultancy services and facilitate soil testing, 24 percent increase in overall credit support to agriculture, extension of kisan credit cards to all eligible farmers etc. Similarly fiscal incentives to food processing industries based on perishable items such as vegetables and fruits as well as encouragement to cold storage facilities would not only help in conserving perishable agricultural goods (estimated loss of around Rs. 30,000 crores per year) but also would help farmers in getting better prices. The Party welcomes the government's decision to increase minimum support price of wheat by Rs. 30 a quintal, grams by Rs. 70 a quintal and oilseeds by Rs. 100 a quintal.
The proposed amendment to the Essential Commodities Act 1955 would facilitate free movement of foodgrains-thus ending the paradoxical situation of surplus in certain regions and simultaneously shortage in other regions within the country. Proposal to end monopoly of Food Corporation of India in handling procurement, storages etc would lead to efficient and cost-effective handling of foodgrains to the benefit of consumers. Involvement of State governments in handling Public Distribution System would increase their accountability in implementation of the poor people oriented scheme.
Allocation of Additional Rs. 2,500 crore for rural road construction would not only help in generation of employment opportunities but also facilitate linkage of farmers with domestic as well as international markets. The decision to provide electricity to all hitherto neglected 80,000 villages within the next six years would be a major step towards integrated rural development.
In the background of earthquake in Gujarat, the National Calamity Contingency Fund set up earlier with initial corpus of Rs. 500 crores is being augmented by imposition of two percent surcharge on personal and corporate tax. Assistance will be provided to the State Government under various centrally sponsored schemes for reconstruction of roads, bridges, power installations, schools buildings, public utilities and other public infrastructures.
Steps to promote infrastructural sectors (10 years' tax holiday, 93% increase in investment on road construction etc.) along with measures to revive capital markets, removal of surcharge on corporate tax, labour laws reforms, etc. would create conducive investment climate leading to acceleration in industrial growth with better job opportunities.
The proposed labour laws reforms would ultimately result in better returns to workers and enhanced job opportunities. Proposed amendment to contract labour laws would encourage employers to increase fresh recruitment, especially, in the labour-intensive industrial units. It would lead to healthy linkage between accountability from workers and productivity - leading to higher profit which is bound to be shared among workers. Similarly proposal to facilitate easy exit of unviable units upto 1,000 workers would stimulate investment leading to growth with employment opportunities. Infact, stringent exit policy has been the major deterrent in flow of investment and also a major cause of NPAs (Non-performance assets) which is at present around Rs. 60,000 crores. At the same time the government has raised compensation to the affected workers from 15 days to 45 days salary against each year of service put up.
The government's decision to cut down interest rate on small savings from 11 percent to 9.5 percent may appear to be a harsh step specially to people with hard earned savings to depend upon. Though there is cut in actual gain by 1.5 per cent as compared to the immediate past, in real terms they continue to be the gainers. Because, inflation in terms of consumer price index is, still, around four percent and over five percent below the new interest rate. It may be recollected, here, that people were actually losing even when the interest rate was 12 percent two years back -- due to 13.1 percent inflation rate in terms of consumer price index. Moreover, this step was crucial to set an environment of low lending rate. Economists are almost unanimous that low lending rate would step up investment -- leading to growth with employment opportunities. At the same time this executive recommends to the government to consider providing some relief to the affected depositors in small savings.
The procedure for privatisation of public sector enterprises has now been considerably streamlined. To maximise returns, approach of the government has shifted from disinvestment of small lots of shares to strategic sales of blocks of shares to strategic investors. Disinvestment process is as per the declared policy of the Party and the government to facilitate professional management through functional autonomy. At the same time, care has been taken to protect interests of workers. In this context, the government has proposed to introduce a new scheme of group insurance namely, Ashraya Bima Yojana to extend security cover to such affected workers. The policy will provide compensation of upto 30 percent of the last drawn annual pay for a period of one year to the workers who lose their jobs.
The Party notes with satisfaction various social welfare measures which would take care of weaker sections of the society such as agricultural workers, dalits, women etc. Khetihar Bima Yojana would entitle a pension of Rs. 100 a month to agricultural workers on reaching the age of 60 years. Similarly widows and destitute women could become economically self-reliant with the proposed micro-credit support. Decision of the government to grant Rs. 100 a month to poor students studying in 9th to 12th in classes would go a long way in extending blessings of Goddess Saraswati even at the doors of poor families. In keeping with government's commitment to improve welfare of Scheduled Tribes, a separate National Scheduled Tribes Finance and Development Corporation with an authorised capital of Rs. 500 crores has been set up. Similarly, workers who may lose job as a result of disinvestment would get insurance coverage.
The Central Budget for 2001-02, in nutshell, is a major step in the direction of facilitating economic growth with social justice--with welfare measures as well as employment opportunities specially, to poor people through rural connectivity, increase credit support to weaker sections and encouragement to cottage and small industries etc.
The Party would like to make the following suggestions to the Government.
1. Speedy implementation of all social welfare and developmental measures.
2. While initiating the second generation reforms including labour reforms as these are in the overall interests of the economy and to improve quality of human life, utmost care should be taken by the government to protect interests of the poorer sections and workers with regard to increase in employment opportunities and accessibility to essential items.
3. Strengthen anti-dumping machinery and provide timely protection to domestic economy, specially the agricultural sector.
The Central Budget for 2001-02 has received widespread appreciation-surpassing the earlier three budgets of the NDA Government. Yet, within a fortnight of presentation of the Budget, when there was an all round sense of hope and confidence, the phony crisis created by Tehelka tapes and the sinister exploitation of the same by the Congress Party has caused damage to the economy. The National Executive Committee, therefore, resolves to expose this cynical game of the Congress Party by educating the people. Economic dimension will be integral part of our forthcoming nationwide mass awareness campaign against the Tehelka related conspiracy through which the vested interests wanted to destablise the economy and the country.