SYNOPSIS OF DEBATES - THE FINANCE (NO.2) BILL, 2009 - dated 24-7-2009

LOK SABHA  

SYNOPSIS OF DEBATES

(Proceedings other than Questions & Answers)

Friday, July 24, 2009 / Sravana 2, 1931 (Saka)  

THE FINANCE (NO.2) BILL, 2009

THE MINISTER OF FINANCE (SHRI PRANAB MUKHERJEE) moving the Finance Bill for consideration, said:  The Finance Bill is a unique Bill in the sense that some part of it becomes operational the moment it is introduced and after that the hon. Members get the time for discussing the Budget in details.  Demands for Grants are passed and after that the Finance Bill is taken up for consideration by the House.  So, at this stage there is no scope for making any observation.  With these words I beg that the Bill be taken into consideration.

SHRI JASWANT SINGH: initiating the discussion on Finance Bill said:  If the finances and the economy of the country are sound, then only one can advocate for common man's benefit and then only, the Aam Admi will benefit.  From the President's Address to the Joint Session of Parliament, a lot of things flow.  The entire policy of the Government flows and the Budget also flows in its totality from that.  The Finance Bill is the child of the Budget.  The Budget, in a sense, is the instrument of the fiscal policy of the Government.  Important objective of the Finance Bill is impart the country's public life a degree of purity.  

Paragraph 73 of the Budget speech relates to cyclone Aila.  Mr. Finance Minister have allocated an additional sum of Rs. 1,000 crore for meeting the requirements arisen due to cyclone Aila.  I do not think Rs.1,000 crore is adequate.  The Left Front Government is the most parochial in the application of that money when it comes to the Darjeeling Hill area.  The entire definition of "disaster" or "calamity" is different.  The cyclone has resulted in devastation in the hill districts, landslides, house collapse and deaths were its consequences.  It is in this context that I appeal to the Finance Minister, to allot a sum larger than Rs.1,000 crore. Allot a sum that is directly the hill areas of Darjeeling because for the last thirty years the Left Front Government has neglected Darjeeling Hill area as never before.  Darjeeling is the only district in the country which adjoins four international boundaries. It is the gateway of the entire North-East.  You have sanctioned roads for Sikkim, but no roads have been sanctioned for Darjeeling.  You allocate for Sikkim a border road on the ground that it is a border State.  Though it is adjoining four international boundaries, yet you do not consider Darjeeling to be a border area. You should actually go to see the condition of roads there.  Thirty-Six people died in the recent cyclone.  Damages worth crores of rupees have been caused.  I am glad that a Tripartite Conference has been called on this matter.  I urge you to recognize the need for a Gorkha land.  It is the oldest of the demands that have come.  The entire Himalayan tracts from the North-East - whether it is Nagaland, Manipur or Arunachal, Mizoram, Uttarakhand and Jammu and Kashmir - have been recognized as separate States.  What wrong have the Gorkhas done for not deserving a separate State?  

The next point is about One Rank One Pension.  I congratulate the Government that it has recognized the legitimacy of the demand for One Rank One Pension.  Whether a Member of Parliament becomes a former Member from 1952 or from 1990, he gets the same pension because the principle is irrespective of the year when you go on pension, you must get the same pension because at some level, the recognition here is the inflation index.  You have granted One-Rank One-Pension for Other Ranks and JCOs but you have left out the officers.  You are dividing the Armed Forces into two categories.  This is a typical example of bureaucratic limitedness of thinking.  I appeal to you to kindly correct this wrong before it goes out of hand.  

In my personal view, you do not need a Finance Bill at all because in effect what happens is that the Finance Bill is a consequence of the policy that you have announced in the Budget and through the instrumentality of the Finance Bill, you introduce all the various changes and taxes.  I think, this annual orgy of Budget-making that we engage in is totally wrong.  I am not an economist but I say this on the basis of experience that this system is far inefficient and antiquated.  After all, the Finance Bill gets reduced to changes in Direct Taxes and in the Indirect Taxes.  What is so sacrosanct or secret about the Direct Taxes?  So, the kind of ritual that we go through here is totally unnecessary and time consuming.  Discretion is equal to dictatorship and corruption.  If you start granting discretion to officials that they can exempt this thing or tax this thing, the law must be specific.  You have announced that you are going to reintroduce a new Tax Manual.  Please simplify it.  

About 50 per cent of the world's forests have perished.  The remaining forest cover of India will be gone within the next 30 to 40 years.  There is a very real danger of the green house gas emissions particularly from the developed countries.  Fresh water is one of the most serious problems that we are facing in the country.  We have the largest glacier wealth of the world, yet we do not have an institute for studying our glaciology.  Our glaciers are depleting at a rate of 15 meters per annum.  The Ganga may dry up in the next 30 years.  

Please reflect on your entire neighbourhood.  If our neighbourhood is disturbed, India will never be able to develop as it wants to.  We have a very serious external security scenario.  Please do reflect on the internal security situation also.  

We are not the voices of the corporate houses.  That is another reason why I think that the entire set up of this taxation system must be the preserve only of the Finance Minster.  As regards tax exemptions, you have created an impression that you have given exemptions but in fact you have not given any this exemption.  I do not see the sense in granting an assessing Officer the right to reassess without any reason and open cases that are 20 years old.  This will give rise to dictatorship and corruption.  That is why I have always held that if less discretion is granted to the executive, including elected executive, the purer will be the public life of the country.  An amendment is proposed which grants total exemption to partly-religious and partly-charitable institutions, mixed trusts, from tax on anonymous donations except where the anonymous donation, is made to an educational or medical institution.  I do believe that we need to encourage the whole concept of charity further, particularly when it comes to education and medical.  Another difficulty relates to the discrepancy between the Wholesale Price Index and the Consumer Price Index.  It is misleading, you need to correct this.  There is this preoccupation with Gross Domestic Product.  A common citizen cannot eat GDP.  GDP eventually must result in growth.  Of much greater value, would be a concept of Gross National Contentment.  The fiscal deficit and revenue deficit are real areas of worry.  The only way to restore fiscal balance is economic growth.  If the economic growth goes from 8.5 per cent to nine per cent, you should require that the tax revenue must go up.  During the three years from 2007-08 to 2009-10, the revenue deficit has gone up more than four times.  The revenue expenditure has increased by more than Rs. 3,00,000 crore while the tax revenue has risen only by Rs. 35,000 crore.  I recognize that it is due to interests, Defence, and Bharat Nirman Programme, National Rural Employment Programme and also possibly due to the 6^th Pay Commission.  Today drought is very serious problem because of the rainfall shortage.  I do not want famine to strike us; I do not also want that the rainfall deficiency to strike us.  I pray for rain because I pray for your success.  We have to firstly reform the mindset about the entire budgetary process.  This is the most tedious method.  It is a very difficult job.  The passage of the Finance Bill will actually add to your difficulty.  We have to collectively address this question, not simply of the reforms of the mindset in which we are approaching the entire economic management of the country but also the methodology.  Why do you want to do only once a year?  Break it up.  Do it three or four times in a year.   The Finance Bill is after all only a question of tax reforms.  Let the Finance Minister do it.  The Finance Ministry is the only Ministry of the Government of India which has not been reformed since the British day.  It is vital; it is very important that you change it.  You reform the Finance Ministry as an instrument for the development of India and not for torturing citizens of India.   Please reform it.  The Finance Ministry should be an example of the moral authority of the country.  It is very important that the treasury operations must be separated so that the Finance Minister can apply himself or herself to the reality of the economic management of the country.  I would make one more request that please either abolish or merge the Planning Commission and the Railways into the Finance Ministry.  There should be one authority and that should be the Finance Ministry.  Call the Planning Commission the Reform Commission or some such appropriate nomenclature may be given to it and make it a part of the Finance Ministry.  So, the Finance Ministry be renamed as 'Ministry of Economic Development' because that is what India needs.  In that, Mr. Finance Minister, Shri Pranab Mukherjee, you have my fullest support for the economic development of India.  I pray for the economic development of India.  I will work with you and I wish you well.

 SHRI SANDEEP DIKSHIT:  I would like to congratulate our very senior Member, hon. Shri Jaswant Singh for delivering an entertaining and learned lecture on the Finance Bill.  I endorse Shri Jaswant Singh's view that it would be desirable if we could do away with the ritual of presenting the Finance Bill and it is merged with the full Budget.  We must appreciate our Finance Minister that he has managed to mobilize funds for the Government to function in this period of global recession.  The hon. Minister has taken all the necessary steps to ensure that funds are made available for the investment wherever it is needed.  I would like to thank him, both of his Ministers of State and the entire Finance Ministry for the great work they have done.  However, we need to bring about some changes in the system of mismanagement of our finances.  It should be done in the positive manner.  Taxation does not mean that we collect money and disburse it to the State Governments for the development of the people and the country.  It also seeks to send a message to the entire economy of the country, various sectors, different industries and the individuals relating to different strata of society.  When we talk of green taxation, we want  the message for the environment conservation to be conveyed which we often tend not to take cognizance.  Some of the States have taken measures to conserve their forests during the past fifty to sixty years.  These States could have exploited their forest areas for agriculture purpose.  They could have set up industries there or constructed buildings and undertaken projects by felling the trees.  However, they kept the overall interests of the country as well as their States utmost into their mind.   However, we never give such States an indication or message while allocating funds and levying taxes that they deserve more funds since they acted in the national interest.  The hon. Finance Minister has to keep all these things into his mind.  The way we behaved during the past 25-30 years, we have spoiled the environment and completely destroyed it as a result of which the irreparable loss has been caused to the environment.   This has led to a sort of drought situation where we find ourselves helpless.  The States which have been loser due to conservation of environment and are deprived of the fruits of development, they should be given more funds and benefits in comparison to other States.  Today we are faced with a global recession.  Still, we have to accelerate our pace of development.  In the Statement of Revenue Foregone, the Government states that it could have mobilized much more revenue had it not foregone the same on such and such account.  Total thirty-three per cent tax is charged as Income Tax and Corporate Tax.  However, the real tax collection is around 21-22 per cent only.  Our industry people wish to be treated as per the international trade practices.  However, when the question of paying tax comes, they want to pay taxes as applicable in African countries.  We have foregone Rs. 1,28,000 crore under excise duty regime.  Likewise, Rs. 68,000 crore has been foregone under corporate tax and Rs. 1,00,000 crore under income tax.  Today, the country requires more funds.  Hence, these figures need to be brought down.  So far as wealth tax is concerned, if we take into account people having a wealth of  Rs. 15 lakh, then the total  wealth  of the country amounts to Rs. 35,000 crore only. This fact is not acceptable to me. If we take into account these small things, we would be able to pump more funds into the economy of the country and we would be able to expand the ambit of our taxes.  Our Finance Minister has taken some good initiatives for which I wish to thank him.  He has touched a very important point i.e. political contribution.  I think every Political Party need to pay more attention to this point.  Everyone wants our Parliamentarians to be above board.  Our Political Parties do not work as such organizations which generate revenue which fetch return.  This is a fact that if the political contribution is received from good and fair source, our leaders too would be honest and fair.  Hence, this aspect need to be given a thought.  We need to give positive signal for the promotion of environment and greenery.  There was a process of reforms initiated in the year 1991-92 which advocated a change in the whole financial system.  Likewise, our Education Minister is also talking to bring about changes in the education system.  We look forward to the Finance Minister that if the suggestions given by Shri Jaswant Singh and other Members are taken into account and implemented, it would help the Government and the Parliament to act better and march ahead.  Today, we need to bring about some changes in Income Tax Rules.  There are some vested interests who work behind such financial and taxation regime and keep it complicated.  They are not only the bureaucrats, but there are other people too.  We need to reform our tax system.  The share of excise and customs in our revenue has been declining whereas, the share of Income Tax has been growing.  The Finance Minister has made it clear that he will make efforts to simplify all this.  I shall request him that the simplification is not needed only in the Income Tax form, but it is needed to raise the revenue collection.  While concluding, I shall appreciate the efforts made by this Government to lead our country out of the recession.  I hope that when the international economy gets stabilized, you will take cognizance of the suggestions, I have made in the House.

 SHRI P. KARUNAKARAN: The Finance Minister has presented the Finance Bill for the year 2009-10.  It mainly deals with the revenue that we  need to meet the public expenditure.    In the Budget speech, the Finance Minister has made it categorically clear that there is sufficient investment to meet any challenge that our economy now faces.  It is true that the expenditure has increased.  When we go to the amount of the expenditure, we find that 50 per cent of the total investment is mainly on the payment of interest and the defence expenditure.  There is no substantial amount for the salaries of the Government employees.  As regards assistance to the States and the Union Territories, there is an increase, but it is only 8.22 per cent.     Now, we have to see how the Government mobilized money.  Here interesting thing is that though the level of increase of tax revenue is low, the total revenue receipts are expected to increase by Rs. 52,324 crore.  It is possible because the major share comes from non-tax revenue.  The Government is  really selling the Government assets.  When we go to the tax structure, it is evident that there is no substantial addition from the corporate tax.  The figures show that there is growing tendency of tax evasion, especially, in the corporate tax sector.  The number of millionaires has increased in the country.  At the same time, assets of the corporate sector also have increased to three times.  So, the Government has a wide scope to tax and to earn more revenue.     If the Government can put restrictions on certain concession given to the corporate sector the Government can hope to get some more revenue.  In the case of the personal income tax, a series of concessions and reliefs have already been announced.  But such concessions may not benefit much the people who are marginalized.  Wealth Tax is another sector where the Government has given more concessions.  It is interesting to note that the total amount that is given by way of rebates and concession is to the tune of Rs. 4,18,095 crore and so in two years time this would be around more than Rs. 8 lakh crore. In short, the proposals of the Finance Minister show that there is sufficient revenue to meet any challenge.  But the Government is unwilling to extract tax from the upper strata of the society.  There are two major constraints that we face today.  One is the price rise and the other is the loss of job opportunities.  The Government cannot be excused for price rise.  In the Economic Review, we have not got any perfect picture regarding employment situation in the country.  But generally, it admits that there is loss of employment, be in private or public sector or in any other sector.  We see that lakhs of people are returning from foreign countries, especially from Gulf countries.  I request the Government to at least have a rehabilitation scheme to assist them.  I would like to give some other suggestions regarding taxation structure.  I request the Government to abolish the tax imposed on the urban cooperative banks which are really the assets of the people.  I request the Government that there should be restrictions on taxation of palm oil.  Otherwise, it would be very difficult for the coconut farmers to have a better price.  The Government has imposed 8.5 per cent tax on perfumed coconut oil.  That also has directly affected the coconut sector.  In many development works, we are acquiring land.  At the same time, when people get compensation, Government imposes ten per cent tax for the compensation.  This tax of ten per cent also should be abolished.  

 The Government of India have banned any kind of export of foodgrains.  It is because of less production, drought and floods in some areas last year.  But it is stated that the Government of India have decided to export foodgrains to 21 South African countries not through FCI but through private parties.  The Government should make the issue clear.  My last point is about the drought and flood in many parts of our country.  The Government should send teams for providing relief to the people.

 SHRI SHAILENDRA KUMAR: If we see the economic conditions of our country, we find that our country has been reeling under floods and drought.  The inflation is at its peak.  On the other hand, our economic policies have affected our farmers very badly.  This Budget has provided that the farmers shall be granted loan at the  interest rate of six per cent.  Whereas Dr. Swaminathan Commission and the Standing Committee of Lok Sabha have recommended that they should  be granted loan at interest rate of  four per cent. It means that we have been unable to give them relief directly.  That is why in spite of doing all these things, the farmers are still forced to commit  suicide.  Our efforts for the development of agriculture have been few and far between.  We have very less irrigation capacity.  Due to the global warming, our glaciers have been melting, putting further strains on our irrigation potentials.  So, we need to augment our efforts to strengthen the agriculture sector.  

 NREGA had been launched with much fanfare.  But there are a lot of loopholes in this scheme.  The labourers working under this scheme are given money through banks.  But there are labourers who need money daily to feed their families.  So, they are forced to take loans from private moneylenders and thus get trapped in debt.  The Government should ensure that these labourers are given money directly and daily. The Government has said that NREGA will focus on  building durable assets.  But, there is a lot of gap between the Government and the market rates of the construction material.  So, this should be kept in mind.  Pradhanmantri Gramin Sadak Yojana has also its drawbacks.  The roads are built but no attention is given towards their maintenance.  Now the Government has also brought major roads under this scheme.  But, unless, we connect small villages and hamlets with the major roads, the development of our country cannot be ensured.  Indira Awas Yojana and Rajiv Gandhi Awas Yojana aim at building houses for the poor.  In rural areas the Government gives Rs. 25000 for building a house.  I shall request the hon. Minister that at least Rs. 50000 should be given to each beneficiary.  Hon. Minister, in his Budget speech, has said that 5.4 crore employment opportunities will be generated.  But he has failed to clarify that whether this figure also include the employment generated under NREGA or not.  We want that our educated people should get employment.  If the Government cannot provide them employment they should at least be given unemployment allowance.  Under the JLNURM, the Government release money in installments. Usually there is a long gap between the release of two installments.  It makes negative impact on the work which is being done.  For rural electrification, the Government has increased the allocation by 87 per cent.  But, the Government should make separate allocation for the electrification for the slums which have major concentration of SCs people.  The Government should also give a push to the development of backward states like Jharkhand, Bihar, Uttar Pradesh and Orissa etc. and grant them special package.  I would also like to request that the income tax ceiling for the Government employees should be raised.  Further there are a number of employees who are the sole bread earner for their families.  If such employees have two daughters, they should be given more exemptions in the income tax.  I would further like to submit that the MPLAD Fund should be increased from Rs. 2 crore to Rs.10 crore as the present amount is very meagre sum.  Either the Government should dispensed with this fund or increase it to Rs.10 crore.  Today, the basic problem in the rural areas is potable water.  I request the Government that they should allow the Member of Parliament to distribute at least 5000 handpumps in their respective five assembly constituencies so that the problem of potable water can be solved.  Ours is a very backward area.  Entire region is in the grip of drought as there was no rain.  I request the Government to declare Kaushambi, Pratapgarh, Fatehpur, Allahabad as a drought prone areas and a special package should be given to them.  If the Government is really serious in helping them, they should send a Joint Parliamentary Committee to these areas so that they can have first hand information in regard to prevailing drought like condition there.

 SHRI B. MAHTAB: The high economic growth of the last few years has provided the government with additional resources for expenditure on social sectors.  However, there are gaps between plans on paper and actual practice.  There are various non-financial constraints impeding progress in all sectors, especially in social sectors such as health and education.  Removing such constraints entails improving the quality of governance.  The Budget seeks to eliminate the surcharge on personal taxes, thereby increasing the disposable income in the hands of individuals and boosting consumer spending.

 It must have been noticed that indirect tax collection in the first quarter of this fiscal year are lower than those in the same period last year.  Did we expect this?  Yes, three stimulus packages since December have contributed to it.  Hiking excise duty rate is also not a solution either, yet some are taking solace on the fact that advance corporate tax collection has shown a growth of around six per cent in first quarter over the same period last year.  The projected decline in tax collection by the Government is likely to have serious impact on State Governments' finances.  That would hamper their ability to participate in any meaningful effort at stimulating the economic activity.  Further, gross tax revenues of the Union Government are projected to fall by seven per cent in 2009-10 and when compared to the Budget Estimates of the previous year, like revenues through income tax and customs, are projected to fall by 18 per cent.  Collections of Central Excise are likely to fall 23 per cent in this fiscal.  Secondly, the unprecedented increase in non-tax revenue in 2009-10 adds a fresh twist to the contentions question of the problems on it.  The States are going to suffer serious erosion of their resource base as a result of the lower collections.  This loss of revenue is opening at a time when the States own revenues ae slowing down significantly.  The increasing reliance on non-tax revenue in the Budget has an important bearing on State finances because these resources are mostly outside the scope of the shareable pool prescribed by the Finance Commission.

 Although non-tax revenues are projected to increase by 46 per cent in 2009-10, the States will be unable to draw anything from this.  Furthermore, direct transfers of funds from the Centre to the districts and administrative structures have increased phenomenally this year.  According to a report this Finance Bill could have a negative impact on smaller States.  Further, lower revenues mean a slowdown in transfers to the States.  This would derail State plans.  Bihar, Orissa, Uttar Pradesh, Madhya Pradesh and Chhattisgarh are the five States who rely more on the Centre's transfer of funds to the States.  This economic crisis, which is looming large over our country today, would affect all States regardless of their size.  But to mitigate the effect of slowing revenue, the Centre has increased the States' borrowing limit by 0.5 percentage point.

 Recently, the Government has set the ball rolling for the auction of spectrum or airwaves, to private sector phone companies for the launch of 3G telephone services.  Similarly, by allowing the private sector to tap another national resource, the Government is hoping to earn some money.  But estimates in this regard is not available.  These are all natural resources, be it telephony, be it gas, crude oil or the like.  These belong to the country, and in all fairness should be shared between the Centre and the States.  But in practice the fact is that the accruals on this account are not shared with the States.  Similarly, the Government levy surcharges on many items:  All these surcharge may be small at an individual level but these cesses add up to a lot of money at the national level.  In 2008-09, these collections are nearly Rs.1.28 trillion.  This comes to nearly 85 per cent of the transfers of the tax revenue from the Centre to the States in 2008-09, and this is nothing small.  There is no illegality in this.  They fundamentally violate the ethics of the Centre State fiscal relations.

 On income tax, a draconian PAN provision has been inserted.  Even Non-Residents are not spared despite Section 139(A).  I am of the opinion that PAN is the basic 'penetrating needle' for the Income Tax Department to rope in every income earning persons.  PAN quoting has been made mandatory for TDS deductor, and if a deductee fails, then penal rate of 20 per cent TDS will immediately come into force.  If one misquotes one's PAN number how will the hapless deductor know that he has committed the mistake?  There is no answer to this, and I would request the Minister to look into this specific aspect.

 The Finance Bill has proposed a committee system for resolution of foreign taxation disputes in the Income Tax.  I would like to know how can a decision taken by this committee be reviewed and if it can be reviewed, in what forum?

 Among a host of amendments the Finance Bill, 2009 has proposed is the retrospective amendment to MAT.  It is to state that, any provision for diminution in value of any asset will be disallowed to increase taxable books profits in hands of corporate assesses/tax payers.  This needs to be reconsidered and be dropped or to be me prospectively applicable.  The Finance Bill proposes amendment to Explanation 5A of Section 271 (I) (C) of IT Act.  It is unnecessary.  I think, there is a little bit of misunderstanding in quoting the figures.  Therefore, a question arises here as to what is the necessity of such presumptive Explanation 5A.  If it is already a settled law that it is concealment, what is the necessity for the Legislature to introduce this Explanation, that too, with retrospective effect?  It appears that Section 5A has been amended in place of Explanation 5.  Please look into this.

 Further, I would like to know as to why does Income Tax Department insist on 65, not 60 as the age for senior citizens?  It is a grave anomaly that needs to be addressed and corrected by the Finance Minister.  This anomaly is there in Dada and Didi's Budget.  This anomaly should be corrected.  Similarly, I would like to know as to why cannot we have an easy tax law?  Perhaps, that is the design.  Before I conclude, I must say that a number of expert committees have recommended to the Government the advantage of having a simplified tax regime as opposed to a complex one.  Plugging loopholes through retrospective legislation is no solution.  The Budget mentions 'revenue foregone'.  In 2008-09 it was Rs.68,914 crore whereas in 2007-08, it was Rs.62,199 crore.  The anomalies should be removed and there is a need to move towards a flat tax regime, which will remove all exemptions and substitute the overall lower effective tax rate.  Therefore, before enacting a new tax code, the Government should finalize its stance on the desirability.  Before I sit down, I again want to remind this House that the Finance Minister while in his intervention relating to the case of Orissa had assured us that he will come back to this House with what has happened relating to the flood relief of 2007-08.  We are still awaiting that reply.  I hope the Government will come back to this House and also to the people of Orissa.

 DR. P. VENUGOPAL: The removal of Fringe Benefit Tax will enable life insurance companies to generate new business from corporate pension schemes.  Increased outlay for police modernization, border fencing and allocations for setting up of more IITs and Central Universities are taken good care of in the Budget.  However, I regret to say that the Budget lacks vision and does not set any clear roadmap for a better India.  The farm growth in the year 2008-09 was a paltry 1.6 per cent and there is  very little to suggest that 2009-10 would be considerably better.  A number of major and medium irrigation projects are languishing due to cost and time over-runs and need additional funds.  Contentious inter-state river water issues such as Cauvery Water Dispute, Mullaperiyar Dam dispute and Palar River Water Dispute need to be resolved quickly in the larger interest of the country.

 There are very few PSUs in Tamil Nadu and I would appeal to the Finance Minister to give a categorical assurance that these PSUs will not be disinvested.  Hindustan Photo Films is one of the old PSUs.  There are over 1,000 employees in the factory with their families dependent on them.  The pay-scales of the employees have not been revised since 1987 citing non-viability as the reason therefore.  If the Centre provides policy support in the field of health care, defence etc. then Hindustan Photo Films can have an additional turnover to the tune of Rs. 350 crore.  The requirement for the revival of this factory is only Rs. 302 crore.  Therefore, I would appeal to the hon. Finance Minister to allocate Rs. 302 crore for it.  It is disappointing that very little is done for the upgradation of primary education in India.  I feel this is more important than higher education.  Therefore, we need to improve the quality of existing schools on priority basis.  The proposed Food Security Bill envisages that every BPL family gets 25 kilograms of rice and/or wheat at Rs. 3 per kilogram.  However, there is no provision in this Budget proposal for the scheme.  Besides, the funds allocated to National Highways Authority of India for the National Highways Development Programme are not sufficient.

 SHRI DEEPENDER SINGH HOODA: The Finance Minister has specifically chosen to ignore the fiscal deficit because the private investment—which was the driving factor in our economic growth story of the last decade—is softening up, and this is the time to enhance our investment in the public sector.  As a result of this, the public investment can replace some of these private investments that are drying up.  I am happy with the overall broad contours of the direction of our economic polity.  I am disappointed that much has not been done for agriculture and farmers in this Budget.  We had demanded that the agriculture loan should be provided to the farmers at the rate of four per cent.  Similarly, there has been an overall reduction of three per cent for the agriculture and rural economy.  Fertilizer subsidy has also been reduced almost by 50 per cent.

 The renewable energy sector is a crucial sector.  India has a target that by 2012, 10 per cent of the total power used in India will come from renewable sources, but I do not think we can ever come close to meeting that target.  We need proper mechanism of incentives like I said, tax subsidy, tariffs, to actually come close to meeting that target.  We think too much about our present.  We forget about our future.  One hon. Member pointed out a fact that within 30 years River Ganga might turn dry.  It is our future and we have to be concerned about our next generation.  We need to make sure that renewable energy becomes one of the major suppliers of energy for us.  And for that we need to radically change the tax incentive tariff regime.  

 What we really need today is greater devolution of Central taxes to the States.  The Twelfth Finance Commission recommended that at least 30 per cent of the total revenue should be devolved to the States.  I think that needs to be raised to 50 per cent.  The expenditure of the Central revenues is usually done through Centrally sponsored schemes.  Each State has its own problems and its own priorities.  A State like Haryana does not benefit from a scheme like NREGA because our wages are higher.  Haryana does not benefit from a scheme like Rajiv Gandhi Vidyutikaran Yojana because all our villages were electrified in the 1970s.   Therefore, acceleration of political federalism in our country has to be reflected in some form of economic federalism also.  I suggest that we start by providing flexibility in the Centrally-sponsored schemes.  A case in point is Rashtriya Krisha Yojana in which broad guidelines are there but enough flexibility is provided to the States to choose how and where to implement schemes so that they can take care of their own peculiar set of problems and priorities.  Another point which could be very beneficial in this regard is allowing borrowing flexibility to the States.  We also need to allow our States to raise money from wherever the States can.  Regarding GST, my demand is that whatever expenditure is borne out of the revenue collected by GST, they have to be split in favour of the States.  I recommend a 40:60 split in favour of the States.

 We have land-locks.  We need to make sure that we provide certain incentives, tax breaks to all the investors who are willing to take a look at the landlocked States.  Delhi Metro needs to be declared as the National Project.  While the metro is constructed within Delhi, the Delhi Metro gets the funding from the Urban Development Ministry, but as soon as it enters the neighbouring States although the Government of India still funds a part of it-has to be funded by that particular Government.  There is a Planning Board to make sure the infrastructure of the National Capital Region comes up in a way so that it does not create too much pressure on Delhi because the differential between Delhi and these small townships outside Delhi does not become too much out of hand.  While the mandate is there to reduce the differential, to have the inclusive growth, to not leave any area behind, as far as National Capital Region Planning Board is concerned, this mandate is not reflected into action. For the Commonwealth Games the National Capital Territory is getting about Rs. 5000 crore.  The entire budget of National Capital Region Planning Board is Rs. 50 crore.  The Government should enhance the direct grant for the National Capital Region Planning Board.  The Board needs to be allowed to issue bonds.  I think issuing such infrastructure bonds could be a very good idea.

 SHRI HUKMADEO NARAYAN YADAV: Today the Indian economy is in the hands of some people with vested interests.  The financial management of the country is in the hands of only five to ten per cent people.  Unless the rural poor, the farmers, the downtrodden, the backwards and the Dalits come to the forefront, nothing worthwhile is going to happen.  I urge that as the Government officials get pension after retirement in the same way the  rural farmers should also be given at least a  pension of Rs. 3000 per month.  Around 15 to 20 lakh people sleep on the footpaths of Delhi.  Has anyone taken care of them?  What has been given to the farmers?  It is the need of the hour that the economy should undergo a change.  Only then something worthwhile can happen.  Unless the downtrodden and last man in the society is uplifted, the country cannot achieve inclusive growth.  When disparity is removed, only then equality can be there in the society.  I had been associated with Socialist Movement.  The people belonging to the Scheduled Castes, Scheduled Tribes, backward communities, women and minorities should at least be given 60 per cent reservation in Government jobs, in Armed Forces   and in trade and politics.  Will the Government do so?  Amend the People's Representation Act.  The way the Government are providing reservation in Lok Sabha and Legislative Assemblies, in the same way reservation should also be provided in Rajya Sabha and State Legislative Councils.  Reservation system should be implemented in the organizational structure of political parties also.  Will this Finance Bill will bring in social justice?  I urge that change this system.  Tax the expenditure and exempt income.  Productivity-based mechanism should be introduced.  The hon. Food Minister claims that 230 million tonne of food grain has been produced.  On one hand you compliment yourself and on the other hand the food grain is imported.  Free this country from favour, grant and compassion.  The day the self-respect of  the country is awakened, it will be a golden day for India. 

DR. RAGHUVANSH PRASAD SINGH:  The UPA Government has not formulated the Common Minimum Programme during this term.  Whether its experience was not good in this regard during its earlier term.  It has this time formulated only an action plan of 100 days.  Prices of essential commodities are rising.  The policy of Government should be that luxurious items should expensive and the essential items used by poor people should be made cheaper.  But just opposite of it is happening here.  Prices of luxurious items are decreasing and prices of essential items used by the poor people are rising.  Inflation is reduced to zero on papers but prices of essential items have increased.  Tax policy of the Government should not create problem to the taxpayers.  The common man, small traders and entrepreneurs are ready to pay tax but they want the taxation procedure to be hassle free.  Tax procedure should be simplified.  There is resentment among the people against exemption of only Rs.10,000 in income tax.  The gap between haves and have-nots is increasing. There is no mention of reducing this disparity in the Finance Bill.  There is no mention of measures to be taken for checking wasteful expenditure.  Today, corruption is all-pervasive from top to bottom but no measures have been suggested to eradicate it. If Government implements the Five Point programme of awareness creation, people's participation, transparency, strict vigilance and monitoring and accountability, only then corruption can be eradicated.  Black money is increasing in the country.  We have come to know recently that black money of Rs. 73 lakh crore is stashed in Swiss Banks.  Condition of farmers is miserable today.  Subsidy should be provided to them.  We cannot achieve the goal of self-reliance unless the condition of farmers is improved.  We have to take steps to increase foodgrain production. Without electricity development is not possible.  We have immense potential for hydro-electric power generation.  This potential should be fully harnessed.  We should give top priority to hydro-electric power and solar energy.  

Various commissions and committees have been constituted in the field of education and now the government is bringing Right to Education Bill which will make provisions for mandatory education of children between 6-14 years age group.  Nursery or Kindergarten schools should be opened in rural areas on the line of urban areas.  Why District Vigilance Monitoring Committees have not been constituted to see implementation of NREGA?  The Government should notify these committees at the earliest and its meeting should be held once in three months so that irregularities could be checked in implementation of this Scheme.  MPLAD is a good scheme but its implementation is not proper.  So it should be abolished.  

SHRI SANJAY NIRUPAM: We are discussing the Finance Bill and I feel that the gist of this discussion is that the Government is not running the economy properly.  This is first year and first Budget of this Government and the Government has faced several crises during this year.  On the one hand there is global recession and on the other hand drought like situation is prevailing in the country.  The Government will pay attention towards these problems and towards the expectations of the people in the coming days. (Speech unfinished.)

The Discussion was not concluded.