Tuesday, February 26, 2008

A Mixed Fare

A Mixed Fare

The Budget 2007-08 presented today in the Assembly by the Chief Minister, Mr Pratapsing Rane is neither inclusive nor populist in nature, notwithstanding the many subsidies, waivers and incentives. The major task before the government is to increase the share of agriculture in SDGP to 7.7% in the Eleventh Plan. The budget promises to provide subsidies to farmers for purchasing pumps, etc but evidence is lacking how these are pushing agriculture. The government intends to motivate farmers for cash crop farming away from rice. The prime task to define the land use pattern for paddy has not been undertaken, notwithstanding the government taking up the exercise of carrying out a fresh survey to update the cadastral maps and records of rights in the background of the recent controversy over scrapping of the Regional Plan 2011. It is interesting to watch that at a time when the government intends to increase the share in the GDP, it has opted for small increases in the allocation which invariably would be consumed by the inflationary trend.

Though the government has announced an increase in the financial assistance under Dayanand Social Security Scheme and has opted for waiving loans outstanding taken by the SC community and loans taken by SC /ST for construction of houses, it does not support adequate allocation. The DSS scheme itself would consume substantial budgetary allocation leaving no fund for other social works.

What is intriguing is the proposals to slash allocations for tourism and education. Tourism is important to the state’s economy. It is very essential to boost it in order to generate more avenues for small business and educated and uneducated employment. But its outlay is reduced from Rs 27.63 crore to Rs 23.12 crore. The allocation has been reduced when the number of tourists needs to be increased and besides, the department is planning to diversify in other areas like eco-tourism and medical tourism. The budget is silent on the mechanism as to how to keep the flow of tourists growing. The decline of 7 percent in tourist arrivals was first witnessed in 2004, followed by a decline during the last two years.

The budget has spared people from fresh taxation. It also provides more incentives for government employees. However, it has proposed an environmental cess of 0.5 per cent on the gross value of electricity bill for creating a special garbage management fund. But the budget is silent on the mechanism as to how to tackle the garbage problem which has been lingering for years. It also does not offer much to the industry except the entry tax exemption on machinery and equipment for new units and also to existing units who are investing at least 50 per cent or more on expansion and drawing a separate action plan for infrastructure development like roads, uninterrupted water supply and electricity to industries in consultation with the leaders of commerce and industry.

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