The Hindu : 'Farmers not getting urea subsidy'

Online edition of India's National Newspaper
Sunday, Mar 02, 2003

Front Page

Front Page

'Farmers not getting urea subsidy'

By Alok Mukherjee

Jaswant Singh during the interview . — Photo: Shanker Chakravarty

NEW DELHI MARCH 1. A day after his budget presentation, the Union Finance Minister, Jaswant Singh, said the focus of criticism on urea prices was "misplaced".

"Of the total tapestry of the budget, to pick out one single thread as being mis-coloured would be unfair to the entire structure of the budget," Mr. Singh told The Hindu in an exclusive interaction here today. "Is the objection to giving subsidy or is it to not giving subsidy? Then the question is who should get the subsidy — the farmer or the industry. You know it, the farmer is not getting the subsidy, the industry is".

Putting the matter in perspective, Mr. Singh said: "My subsidy bill is near Rs. 50,000 crores with fertilizer alone claiming Rs. 12,700 crores. The Naphtha prices have gone up by 44 per cent and all that I have done is to increase fertilizer prices by 1.7 to less than five per cent. I do believe that we need to reflect on this."

On the point that urea prices could become a rollback proposition, he pointed out that fertilizer prices were raised by five per cent last year too and that increase stayed. "The issue got lost in the other din that followed the budget. Such is the irony of governance....."

Mr. Singh was, however, reluctant to respond to Opposition criticism of his budget, saying "I rather not...I have very high personal regards for Manmohan Singh.... But certain areas are not open to partisan politics and I think compulsions of combative Parliamentary democracy pressure all of us to adopt this role."

Instead, he focussed on what he termed major initiatives in the budget such as the debt swap scheme for the States involving Rs. 1,20,000 crores, the Rs. 60,000 crores proposed for infrastructure development, the host of social schemes, the insurance scheme for the poor with a premium of Re.1 per day and State support in the premium for the below poverty line population. ''I am afraid all this could get drowned if the focus is one or two things in the budget. That would be a grave wrong,'' he added.

The Finance Minister partially accepted the charge that his budget takes away more from the salaried class that what he has given. ''Yes, service tax will net about Rs 3,200 crores additional while the direct tax reliefs I have given are Rs 2,955 crores. It is just a few hundred crores, but the picture has to be seen in its totality. There are other benefits that I have given.''

He also added that the service tax would soon have to be shared with the States. "We will move a Constitutional amendment Bill for that. The States too will get a share."

Mr. Singh conceded that the petrol and diesel price hikes announced on the day of the budget would affect the overall sentiments.

"The Rs. 1.60 increase included what they were planning to do for some time. They just took advantage of the cess proposed in the budget."

On whether the additional 50 paise cess on petrol and diesel would have an inflationary impact, he said that crude oil prices had shot over $ 35 a barrel "but the Gulf situation is not going to last long. In fact, the six-month forward position on crude is about $ 25-30 a barrel. When the prices come down, the consumers will also get the benefit of that."

The Minister, however, conceded that the increased service tax, the higher cost of petrol and diesel and the likely increase in LPG and kerosene prices could "puncture" the "feel good factor" that his budget tried to create among the salaried class. "Yes, that is a possibility and we will have to manage that."

On whether the Kelkar reports had been buried he said: "Not at all. There are two Kelkar reports and the reports have two aspects each — rates and the administrative set-up. In the case of the indirect taxes, 90 per cent had been adopted.

In the case of direct taxes, 90 per cent of the administrative recommendations had been adopted. "About the tax rates, I cannot push it, the system will not digest it. It (the implementation) has to be progressive."

Printer friendly page
Send this article to Friends by E-Mail

Front Page

Stories in this Section

Cong. wrests Himachal, Left retains Tripura

Iraq says it has destroyed four Al-Samoud 2 missiles

'Farmers not getting urea subsidy'

Tendulkar paves the way for India's celebration

PM congratulates team

PDP retains Pampore

Maruti cuts prices

NASA releases video