The Hindu Business Line : Kalam's speech echoes sentiments of CMP

THE President, Dr A.P.J. Abdul Kalam's address to the joint sitting of Parliament predictably unfurled the agenda of action the new United Progressive Alliance (UPA) Government led by the Prime Minister, Dr Manmohan Singh, had broadly outlined in its Common Minimum Programme (CMP).

Apart from the salient points of the CMP, the President's succinct statement that democracy was, as described by someone, "a periodic redistribution of power", and that the "people of India have spoken loud and clear" needs to be taken as emanating from the ruling dispensation, which, by convention and customs, prepares the President's speech to the joint sitting of Parliament.

"The mandate they have given to my Government is to treat power as a sacred societal trust to be used for the good of society, paying particular attention to the pressing needs of our farmers and other downtrodden section" is by extension the expression of intent set out in the CMP in general and in the Congress party manifesto in particular.

Even as the Government contends that "we will ensure that the economy maintains a growth rate of at least 7-8 per cent per year for a sustained period and in a manner that generates employment and provides assured livelihood for each family," the UPA Government concedes that "this calls for speeding up economic reforms that ushered the country into an era of rapid economic growth."

The new Government's unequivocal assertion that "further reforms will be carried out in agriculture, industry and services and that "the reforms will have a human face and will ensure that the benefits flowing from such reforms reach the urban poor and rural areas, where the vast majority of our population lives" is a dextrous exercise in balancing the aspirations of the industry and the concerns of the Left parties about the adverse fallout of any pursuit of growth per se.

Lest there should be any doubt about how this is going to be accomplished, the Government reiterates its commitment to eliminating the revenue deficit of the Central Government by 2009 so as to release more resources for investment in social and physical infrastructure.

"Subsidies will be targeted sharply at the poor and needy. A detailed roadmap will be prepared for this purpose."

The Government need not waste time in preparing the roadmap on this as its present Finance Minister, during his previous tenure in the North Block, commissioned a detailed study on merit and non-merit subsidies, which must perforce be dusted off from the shelf for focussed action sooner rather than later.

Again the Government's assurance that it will undertake major tax reforms to significantly expand the base of taxpayers, to substantially increase tax compliance and to make the tax administration more citizen-friendly with the promise that "tax rates will be stable and conducive to growth, compliance and investment" read well.

With his distinguished record of the past in bringing stratospheric tax rates to specious levels, both individual and corporate as also indirect taxes, Mr Chidambaram has now a slew of well-researched reports on the subject including the Parthasarathy Shome Committee as also two parts of the Kelkar Committee to draw critical inputs.

He might also zero in on the cornucopia of tax deductions and exemptions that clutter the tax statute that checkmate the revenue authorities' drive to realise higher tax income.

With the Left party's well-stated stance on taxing agricultural income, as is their penchant for land reforms, the Government might deem it fit to tax at least rich farmers and their farm incomes for the noble cause of building the much-needed social infrastructure. On disinvestment, the UPA Government did consider privatisation on a case-by-case basis and devolved full managerial and commercial autonomy to successful profit-making companies operating in a competitive milieu.

It further went on to add that public sector companies and nationalised banks would be encouraged to enter the capital market to raise resources and offer new investment avenues to retail investors.

So, the former Disinvestment Minster Mr Arun Shourie told Business Line in the Central Hall of Parliament, "As days pass by, the statement of the Government on privatisation and disinvestment come to resemble more and more exactly what was being done by the Vajpayee Government and this is to be expected. I have long argued that there is a consensus in practice and these changing statements make that very clear every day."

In sum, the new Government's attempt to balance reforms with human face would compel it not to jettison well-tested ideas it practised in power during the Narasimha Rao Government, which it accused the successive governments to have hijacked for electoral gains.

The cycle has come a full circle, notwithstanding the jibes and protests from the Left parties, some of the Opposition leaders in Parliament said.