New Delhi, Feb. 4: The Cabinet today approved amendments to the Fiscal Responsibility and Budget Management Bill 2000, diluting the original draft’s tough provisions designed to commit the government to a course of fiscal prudence over the next 10 years.
Briefing reporters here today, parliamentary affairs minister Sushma Swaraj said the provisions of fiscal discipline in the original draft had been diluted. Swaraj, who also holds health and family welfare after the recent shuffle, made it a point to mention that “I continue to be the Cabinet spokesperson”.
The Bill was introduced in the Lok Sabha in December 2000. It had proposed to eliminate revenue deficit and progressively reduce fiscal deficit to not more than 2 per cent of the gross domestic product within a period of five financial years following the promulgation of the law.
The Bill was referred to the parliamentary standing committee on finance, which submitted its report in December 2001.
The original draft had proposed to prohibit certain types of borrowing from the Reserve Bank of India. It had envisaged that within a period of 10 financial years, the total liabilities (including external debt at the current exchange rate) should not exceed 50 per cent of the estimated gross domestic product.
Unlike the earlier draft, the diluted version of the Bill does not set any target for the reduction of fiscal and revenue deficit, Swaraj said. Efforts will be made to have the Bill passed in the forthcoming budget session of Parliament, she added.
“No target has been fixed. The stringent provisions were removed as development may become a casualty and may affect growth,” Swaraj said. “An effort has been made to keep a balance between development and discipline.”
In another significant decision, especially for the oil-rich state of Assam, the Cabinet hiked the royalty on indigenous crude oil to 20 per cent from 12.5 per cent. “Assam and Gujarat are two of the highest crude oil producing states,” Swaraj said. The royalty had been increased following repeated requests made by the oil producing states.
“The states were asking for a hike in the royalty to 40 per cent. But it has been increased to 20 per cent in tune with the provisions in the relevant Act,” she added.
Refusing to give further details on the issue, Swaraj said Union petroleum minister Ram Naik would hold a press briefing on the issue tomorrow.
The Cabinet also paid glowing tributes to Kalpana Chawla, who died along with six other astronauts when space shuttle Columbia broke up in the skies over Texas on Saturday minutes before touchdown.
“Both in life and death, Kalpana Chawla symbolised mankind’s indomitable spirit of adventure, its audacious exploration of new frontiers and its ceaseless search for new scientific knowledge,” a Cabinet resolution said.
Her mission and the strides India’s space programme has made will serve as inspiration for children, students and youths of the country, it added.
The resolution said Chawla’s accomplishments have heightened the self-confidence of Indian women, who see in her a proof that they can do as well as men in pioneering endeavours in scientific discovery.
The Centre tonight decided to continue with the subsidy of Rs 24,000 on air travel for this year’s 70,298 Haj pilgrims. The pilgrims will only have to bear an expenditure of Rs 12,000.
“There has been no increase in the amount to be paid by the pilgrims and that will stand at Rs 12,000. The government will bear the subsidy of Rs 24,000 per pilgrim this year. The total amount on air travel will cost Rs 36,000 for each pilgrim,” Swaraj said.
The subsidy would cost the exchequer Rs 168.71 crore this year, the minister added.