The Hindu Business Line : `India can be made manufacturing hub'

The Finance Minister, Mr P. Chidambaram, today said that the Government was committed to making India a manufacturing hub for a host of industries such as textiles, leather, food processing, handicrafts and petroleum products.

Replying to the general discussions on the Budget 2006-07 in Lok Sabha here today, Mr Chidambaram expressed confidence that the success achieved in the automobile sector, particularly in the efficient production of small cars, could be replicated in these identified sectors as well.

He urged the Members of Parliament to "throw away your political and ideological blinkers" and lend a helping hand to recapture primacy in manufacturing that the country enjoyed in these sectors.

"We have the capacity to become world leaders and top three in at least a dozen industry sectors. Automobile is one such sector. There is a revolution happening in automobiles here. India is today the most efficient producer of automobiles in the world. Unfortunately, we are not noticing this," Mr Chidambaram said, adding that in the next 3-5 years, India would be the largest producer of small cars in the world.

Later, the Lok Sabha approved the relevant appropriations for Rs 4,39,924 crore towards defraying the several charges that might come in the course of payment during the fiscal year. The House also approved appropriations of the order of Rs 42,227 crore by way of amounts spent on services during fiscal year ended March 2004, in excess of the amounts granted for those services for that year.

In his hour-long reply, the Finance Minister confined his address to the management of the economy and its general direction. Stating that he was betting on growth, Mr Chidambaram highlighted that growth was the best antidote for poverty. "Without growth, there is no chance for equity. Growth will also create jobs", he said.

The Finance Minister said that India's growth story would continue to unfold year after year if the country were to be made into a manufacturing hub, a helping hand was given to agriculture and the services sector was allowed to continue on its autonomous growth path without any government intervention. "The best we can do is not to interfere in the growth of the services sector," Mr Chidambaram quipped.

Stating that every Finance Minister was a "prisoner to monsoon", Mr Chidambaram underscored the need to ensure higher rates of industry growth so that overall economic growth does not falter even in years where monsoons fail.

He also said that every effort would be made to ensure that agriculture was less monsoon-dependent and volatility in agriculture growth rates made a thing of the past.

On subsidy, the Finance Minister promised that no one in the government would do anything to reduce subsidy to the poor and the needy. "Whatever food subsidy is required to sustain the public distribution system would be provided year after year", he said.

Referring to tax receipts, Mr Chidambaram said that the gross tax revenues of the Centre has seen at least 20 per cent growth rates under the united progressive alliance (UPA) regime. "Without imposing new taxes, we are collecting more taxes by tweaking rates and removing exemptions. In 2005-06, centre's tax revenues over the previous year were higher by Rs 50,000 crore. In 2006-07, it would be higher by Rs 54,000 crore", he said.

As regards fertiliser subsidy, Mr Chidambaram said that this would be maintained and that he intends to clear some arrears before March 31 this year. On agri-insurance scheme, he said that the Government was in the final stages of designing a revised scheme and that current scheme would continue until a new scheme was finalised.

The Finance Minister also urged the States to spend more, stating that achieving desired growth targets depended on their spending their cash surpluses.

"I am sorry to say that the States are not spending. States are cash-rich. One of the reasons of tightening liquidity is that the States are not spending enough. States must spend and unless money is spent you will not achieve targets", Mr Chidambaram said.

He also announced that six AIIMS-type medical institutions would be set up in the States of Bihar, Orissa, Madhya Pradesh, Rajasthan, Uttaranchal and Chattisgarh.