Guest Column Narendra Modi

The Union budget for 2007-08 has failed miserably in providing the necessary impetus for growth initiatives to the Indian economy and has ignored the aam aadmi.

Politically, India is passing through a phase of coalition governments and it is quite possible that the governments at the Centre and the states may be of different political colours. However, party politics must not be allowed to come in the way of the nation’s growth.

Under the UPA government of Dr Manmohan Singh, states like Gujarat have been done injustice in successive budgets in solving major economic issues, such as extending central excise exemption time limit for earthquake-affected industries in Kutch; clearance of the Industrial Park Bill to set up more employment-intensive industries; allocation of Panna-Mukta-Tapti (PMT) gas for setting up 650 mw power project at Pipavav in Saurashtra; reduction of customs duty for ship-breaking; and the transfer of Vadinar port from Kandla port limits to Gujarat.

Gujarat is the economic growth engine for India and any bottlenecks created to slow down its rapid growth would be counter-productive for the nation’s development.

The Indian agriculture sector is facing a serious crisis. As per the Economic Survey, agriculture sector growth during the 10th plan will be only 2.3 per cent against the target of 4 per cent.

The tall promise of providing farm credit at 7 per cent in last year’s budget has remained a pipe dream. This is proved by the fact that there have been more than 10,000 suicides by farmers in the country in the last few years. What is more painful to note is that many of the suicides have taken place in the more developed states. On the other hand, the country had to import foodgrain and, in a knee-jerk reaction, the government has banned forward trading in wheat and rice.

The second priority for the Indian economy should be to ensure “growth without tears” for the common man. While under the UPA government, the overall growth target of the 10th five-year plan of 8 per cent of GDP is unlikely to be achieved, the monster of inflation has raised its head affecting the common man.

The central budget has claimed higher resource mobilisation through service tax, excise and customs. However, these three taxes are directly or indirectly passed on to the common man and he is reeling under the impact by way of higher prices of articles of daily necessities.

Ignoring the aam aadmi, the finance minister has thought it fit to give tax reduction for “cat and dog pet food”.

MAT has been extended to companies availing benefits under S. 10A & 10B of the IT Act for infrastructure projects, which will be counter-productive.

Co-operative banks were brought under the income-tax net last year.

Gujarat had sought removal of this provision, which has not been heeded. While providing special funds for history and culture in the 150th year of the war of independence, Sardar Patel’s contribution has been forgotten.

Our third priority should be to build excellent infrastructure in terms of power, road, port, airport, railway, irrigation, etc. The Golden Quadrilateral Road project started by the NDA was to be completed in 2003, but it is still incomplete. In the power sector, the performance in the last few years has been dismal.

The nation’s needs for social infrastructure, which includes education, health, water supply, sanitation, etc, will require huge resources, both financial and in terms of manpower. This can only be achieved through people’s participation. But the budget has only cursorily touched upon this aspect without providing for a systematic mechanism to encourage this.

Gujarat has 40 per cent of its population living in urban areas, which is likely to go up to 50 per cent in the next 10-15 years. We have taken a lead in utilising the funds under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) of the government of India. However, Gandhinagar, which is the capital city, is not included in JNNURM, although all other state capitals are included. Similarly, Porbandar, the birthplace of Mahatma Gandhi, and Sardar Patel’s birthplace Karamsad find no mention in the central budget.

Road-cum-rail bridge projects at Mangar in Bihar over the Ganga and in Assam over the Brahmaputra are taken up as national projects of importance. Similarly, the Sardar Sarovar multi-state irrigation project should have been declared a national project.

The middle class and honest tax-payer were expecting a lot of tax relief in the budget but they have been disappointed. On the other hand, a higher dividend tax has been levied.

In the 2007-08 budget, the economic policies of the UPA government are not consistent with the avowed goal of rapid economic growth. Dr Manmohan Singh has wilted under pressure to halt the economic reforms process. Long-term goals for economic growth have been sacrificed at the altar of political expediency.