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'Budget is not the end, tougher measures will follow'

BUDGET 2000

Finance Minister Yashwant Sinha today said the Union Budget 2000 was not the last word on cutting government expenditure and tougher measures would follow to rein in the fiscal deficit.

Speaking to Star News in a post-budget interview, Sinha said mere tinkering with the government structure would not do. "Entire departments will have to be shut down... but we will have to do this in an acceptable manner."

He said the aim was to have a leaner, smaller government. "I have received the recommendations of the Expenditure Committee and appropriate action will be taken."

The finance minister said it was beyond his comprehension why the markets reacted to the budget the way they did. "I have not done anything to upset the calculations of the industrial sector. In fact, it's a soft budget as far as industries are concerned."

When it was pointed out that perhaps his proposal to tax exporters had not gone down well with the market, he said: "I have said we will tax only 20 per cent of their incomes. That's not much. Morever, I feel the time has come when the distinction between rupee-earners and forex-earners should go."

About divestment in public-sector banks, the finance minister said: "These banks need to recapitalise. The only they can do so is by raising money from the market. But at this point of time I don't think we are in a position to dispense with their public-sector character."

Earlier, speaking to another TV channel, Sinha said the divestment target for 2000-01 would be surpassed even though the budget had set "a reasonable and credible target of Rs 10,000 crore (Rs 100 billion)".

"I could have easily set Rs 40,000-50,000 crore (Rs 400-500 billion) target, but I wanted to sound credible with Rs 10,000 crore. Our intention will be to achieve the target by proceeding strongly with the privatisation programme," he said.

Asked about improving the ratio of tax to gross domestic product, which is lower than the 1980 levels, Sinha said the government would expand the tax net but leave the structure unchanged.

"I have cleaned up the excise department... We will see exponential growth in the tax assessees," he said.

Asserting that the government would achieve a GDP growth of seven-eight per cent while keeping inflation between four and five per cent, Sinha said the Budget had continued the economic reforms while directly dealing with poverty and unemployment.

"This will be a continuous exercise. This Budget will not be an end of these efforts," he said.

Sinha said the government was not constrained by the coalition partners, but wanted to take Parliament along the economic reform path.

On small-scale industries, he said the budget has taken measures to prepare them for greater competition.

"We are for the promotion of SSIs rather than protection," he said.

The finance minister was far more serious in his 100-minute Budget speech than his predecessors and he himself have been in the past.

An Opposition MP remarked outside the house that Sinha's speech was like a company chairman's address. Only twice did the finance minister recite couplets, customary in all such presentations.

The finance minister's brisk delivery did not give the Opposition much room to react or protest. The only hue and cry they raised was when Sinha proposed an increase in the prices of fertiliser and a cut in food subsidy.

There again, thumping from the Treasury benches, welcoming his proposal to double the quantum of subsidised ration for those below the poverty line, got the upper hand. The only lighter moment came when the finance minister paused twice to sip water before announcing the proposals for direct and indirect taxation.

The House also welcomed a proposal to give special income-tax incentives to women taxpayers. The finance minister's wife, Neelima Sinha, and their teenage son, who were present in the speaker's gallery to witness the presentation, later told journalists they thought it was a "good and balanced budget".

The Budget presentation was held up for about 15 minutes because many Opposition members alleged that the taxation proposals had been leaked beforehand. They held out copies of a news agency speculating on the tax proposals.

Speaker G M C Balayogi told P R Dasmunshi and Renuka Chaudhury (both Congress) that he would verify their allegations.

UNI

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