The Hindu : 'Most unfunded budget in 10 years'

Online edition of India's National Newspaper
Friday, Mar 07, 2003

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'Most unfunded budget in 10 years'

By Our Special Correspondent

CHENNAI March 6. The Union budget for 2003-2004 is the "most unfunded budget in 10 years" and will, as a result, fail to lift the economy out of the "groove of four to five per cent GDP growth" or alleviate poverty, the former Finance Minister and founder-president of the Congress Jananayaka Peravai, P. Chidambaram, said here today.

The Finance Minister, Jaswant Singh, had only given an "illusion of growth and higher investment" in his budget speech by "failing to put money where his mouth is", Mr. Chidambaram said.

Addressing a meeting organised by the Loyola Institute of Business Management (LIBA), Mr. Chidambaram said the "clever tactician" had failed to provide even one rupee during 2003-2004 for major "initiatives" that had been listed in his speech. The nil-allocation schemes, he pointed out, included debt swap with States, buyback of high-interest securities from banks, compensation to States against loss from introduction of value-added tax (VAT) and reduction in the ceiling on Central sales tax (CST), establishment of a college of rehabilitation sciences, scheme for empowerment of the disabled and funding the LIC's special pension scheme.

Under the scheme to fill the viability gap of new infrastructure projects, it was unrealistic to expect that the Central contribution of a mere Rs. 2,000 crores per year would trigger a total investment of Rs. 60,000 crores in three years.

The former Minister also pointed out that in many crucial areas of "priority" and "concern" listed in the budget speech — health, family welfare, education and tribal affairs — the allocations for 2003-2004 were the same (to the last rupee) as in the budget estimates for the current year, and effectively less after discounting for inflation.

He criticised the token increases in allocation for agriculture and irrigation against the background of a negative growth in agriculture in the current year. The Rs. 40 crores for high-tech horticulture would not benefit the bulk of the farmers.

The additional allocation for bringing additional sections of people below the poverty line into the `annadan' scheme amounted to just Rs. 1,000 per head, assuming there would be no leakages.

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