Pranab dismisses criticism of Budget not being pro-poor .

New Delhi, April 29 The Finance Minister, Mr Pranab Mukherjee, today strongly refuted the criticism that the 2010-11 Budget was not pro-poor, saying it contained several measures that would benefit farmers and rural people, even as it focussed on fiscal correction by partly withdrawing the fiscal stimulus.

Replying to the debate on the Finance Bill, which was later passed by voice vote with the BJP and the Left parties walking out, Mr Mukherjee remarked that if the nine-crore kisan card-holders were not aam admi, who else were?

He said through enhanced outlays on various programmes such as the Mahatma Gandhi Rural Employment Guarantee Programme, the Pradhan Mantri Grameen Sadak Yojana, building up of rural infrastructure and Sarva Shisksa Abhiyan for elementary education and mid-day meal schemes, the poor and vulnerable sections were protected.

Delivery mechanism

He wondered if the Government's effort to bring down the farmers' loan from 7 to 5 per cent was “for the amir (rich)? If there is deficiency in delivery mechanism, surely we shall have to address it” with the Central and State governments and local bodies sitting together to address these issues, instead of “simply raising an accusing finger.”

Taking a dig at the Opposition parties which had organised bandhs to protest price rise of essential items, he asked whether “consecutive bandhs could reduce inflation by 1.1 per cent.”

He said the Centre has brought zero duty import for food grain items to get over domestic supply constraints. It also convened the meeting of Chief Ministers to protect the weaker and vulnerable sections against price rise by providing subsidised foodgrains through the effective public distribution system (PDS). He said the cooperation of all the three tiers of the Government was required and that is what “the Government has done” in the Budget.

Mr Mukherjee said the Government set up a group comprising a couple of Chief Ministers to determine how exactly to improve the PDS.

He told the Opposition that any plea from the rooftops to bring about universalisation of the PDS would not help. It would not be practical to implement because the country did not have the capacity to fulfil even the targeted PDS.

Referring to the demand for rolling back the fuel price hike, the Minister asked how many times the previous Governments had raised fuel prices when the crude oil was ruling between $12 and $36 a barrel against the current average price of $73 a barrel.

He said the Chief Ministers did not raise any issue when it was pointed out to them that 32 per cent of the revenue of fuel price revision amounting to Rs 26,000 crore would be given to the States.

He defended the fuel price revision as unavoidable as otherwise the oil marketing companies (OMCs) would end up with under-recoveries of Rs 85,000 crore this fiscal.

“If out of the Rs 7-lakh crore revenues, after providing for various subsidies, interest payments and defence expenditure, the Rs 85,000 crore is also to be absorbed, what will be left for development?” Mr Mukherjee said.

Tax havens

On the efforts to bring back Indian money stashed abroad particularly in non-sovereign tax havens, Mr. Mukherjee said negotiation were complete with three such havens — Switzerland, Bahamas and Bermuda.

He said India has accepted OECD guidelines on tax havens by accepting Clause 20(c) that had not been there in earlier agreements. He said with the financial meltdown the advanced countries too saw a shake-up and all countries were cooperating now to plug loopholes in tax avoidance practices.

Mr Mukherjee said the Budget had to withdraw partly the stimulus provided in three tranches and hence it took the corrective measure. “I do believe that the economy can bear the borrowing capacity, fiscal deficit to an extent, not beyond that,” he said adding that the measures in the fiscal correction front need to be seen from that angle.

Source : Business Line