The Hindu Business Line : `Budget lacks focus on expenditure'

The Union Budget presented by the Finance Minister, Mr P. Chidambaram, lacks focus on expenditure, according to the former Union Finance Secretary, Mr E.A.S Sarma.

Reacting to the Budget proposals, Mr Sarma, now the convener of Forum for Better Vizag, said here that budgetary allocations in themselves do not necessarily lead to the desired outcome. "There is inefficiency/corruption in loaning/granting of funds. There is no move to prevent diversion of subsidies."

He said that priority should have been accorded to decentralisation and transparency in the delivery mechanism. "The local bodies are the best judges. They should have been vested with the powers to decide their priorities," he opined.

Stating that emphasis given to foreign institutional investment by doling out sops would only help the rich and neo-rich, he said that in accordance with the Common Minimum Programme, more allocations should have been made to social sector spending in education, health, rural electrification and drinking water. Instead, allocation to the defence sector had been enhanced to Rs 86,000 crore.

Mr Sarma regretted that not much emphasis had been laid on having a transparent and efficient delivery system.

On increasing rural credit, he said there was no point in increasing the credit unless it reached the most neglected sections. "It is not a good news for farmers committing suicide. The institutional loans are reaching only 25 per cent of farmers. The money-lenders are catering to the needs of 20 per cent, leaving the rest with no access to credit,'' he stated.

Referring to reduction on duties on small cars, DVDs and soft-drinks, he said this would in no way help the poorer sections. However, the promise to place both goods and services on the same footing by removing the artificial distinction by 2010 is a positive development in implementing the Kelkar Committee recommendation.

In another statement, a tax consultant, Mr G. Prabhakara Sastry, said there was absolutely no justification in increasing service tax from 10 per cent to 12 per cent without safeguarding the interests of small and medium service providers.

``This will crush the genuine tax payees in the middle level business groups and open floodgates for corruption as payment of such huge tax is beyond anyone's capacity," he remarked. He also criticised keeping the threshold limit for small service providers at Rs 4 lakh per annum.

The CITU District Secretary, Mr A. Ajay Sarma, said the budget failed to make any mention on revival of Bharat Heavy Plate and Vessels and Hindustan Shipyard Ltd here. He also criticised dereservation of 180 products from the list of small-scale industries.

The CPI(M) District Secretary, Mr Ch. Narsinga Rao, said Vizag had been meted out a raw deal by ignoring the demand for revival of HSL and BHPV.

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