Calcutta, Feb. 28: Finance minister Asim Dasgupta today said the Union budget will not solve the economic problems faced by common people and the states but did not call it anti-people either.
Reacting to the budget placed by Union finance minister Jaswant Singh today, he said it failed to address one of the most serious problems in the country — unemployment.
Quoting the Economic Survey, Dasgupta said the rate of unemployment has gone up from 5.9 per cent to 7.3 per cent in recent years.
The reduction in interest rates of small savings schemes and PPF will hurt the small savers, especially elderly citizens, he said. But without going through the fine print, he would not comment on the budget’s “negative” impact on common people, Dasgupta added.
He said the rate of growth of the country’s Gross Domestic Product has declined from 6.1 per cent in 1999-2000 to 4.4 in this fiscal. The growth rate index of industrial production has fallen from 6.7 per cent to 5.3 and there has been a decline in the growth rate of foodgrain production.
“This recession in production and rise in unemployment is related to the adoption of the IMF/WTO-guided policy of liberalisation with emphasis on indiscriminate reduction in import duties resulting in the domestic industry and agriculture losing its market. This will lead to recession and unemployment,” said Dasgupta.
The finance minister pointed out that funds for the ministry of rural development have actually been reduced from Rs 18,376 crore in the current financial year to Rs 14,070 crore.
As part of the policy of liberalisation, there has been a dilution of the direct role of the Centre in the banking sector, he said. “As a result, during the ninth plan, there has been a significant shortfall in the disbursement of credit facilities for the vast majority of small and marginal farmers and small-scale industry. Yet, in this budget, there has been a further dilution of the direct social role of the government with the percentage share of private and foreign investment in a banking institution being allowed to be raised from 49 to 74.”
With the declared shortfall in the collection of Central taxes, the shortfall in the share of the states’ entitlements will be Rs 5,094 crore and Bengal will stand to lose Rs 418 crore, said Dasgupta.