Mr.P.Chidambaram, the finance minister presented the budget on 28th Feb.
Many economical reforms were clearly laid. He had tried his best to keep up the promises of UPA through Common Minimum Programme(CMP). In the CMP, the following agenda were stated
"To ensure that the economy grows at least 7-8% per year in a sustained manner over a decade and more and in a manner that generates employment so that each family is assured of a safe and viable livelihood."
"The UPA Government will give the highest investment, credit and technological priority to the continued growth of agriculture, horticulture, aquaculture, floriculture, afforestation, dairying and agro-processing that will significantly add to the creation of new jobs."
"The UPA Government will ensure that public investment in agricultural research and extension, rural infrastructure and irrigation is stepped up in a significant manner at the very earliest. Irrigation will receive the highest investment priority and all on-going projects will be completed according to a strict time schedule. "
"The UPA Government pledges to raise public spending in education to at least 6% of the GDP with at least half this amount being spent on primary and secondary schools. This will be done in a phased manner."
"The UPA attaches the highest priority to the development and expansion of physical infrastructure like roads, highways, ports, power, railways, water supply, sewage treatment and sanitation. Public investment in infrastructure will be enhanced, even as the role of the private sector is expanded. Subsidies will be made explicit and provided through the budget. "
"The UPA Government will make a comprehensive assessment of the feasibility of linking the rivers in the country, starting with the south-bound rivers. This assessment will be done in a fully consultative manner. It will also explore the feasibility of linking sub-basins of rivers in States like Bihar. The UPA will take all steps to ensure that long-pending inter-State disputes on rivers and water-sharing like the Cauvery waters dispute are settled amicably at the earliest, keeping in mind the interests of all parties to the dispute. "
"The UPA Government is deeply committed, through tax and other policies, to the orderly development and functioning of capital markets that reflect the true fundamentals of the economy."
"The UPA's economic reforms will be oriented primarily to spreading and deepening rural prosperity, to significantly improving the quality of public systems and delivery of public services to bring about a visible and tangible difference in the quality of life of ordinary citizens of our country."
The final word of the CMP states that "This is a common minimum programme (CMP) for the UPA Government. It is, by no means, a comprehensive agenda. It is a starting point that highlights the main priorities, policies and programmes. The UPA is committed to the implementation of the CMP. This CMP is the foundation for another CMP collective maximum performance."
Having allied with fourteen parties (RJD, DMK, NCP, PMK, TRS, JMM, LJP, MDMK, AIMIM, PDP, IUML, RPI(A), RPI(G) and KC(J)), the pressure on the UPA's fiscal policies was very intense. Mr.P.Chidambaram was given a great responsibility, not only to satisfy the people but also the allies who are with diverse economic policies. Treading through the line of different economic policies taking care of the common man is a not a cushy job.
Mr.P.Chidambaram, who branched from congress in 1996 regained the party's fame back in 2005. He is not only intelligent to tackle the situation with ease but also grabbed the attention of all. He brought out the reforms going by the CMP, thereby convincing the allies and disclosed policies targeting a common man. CMP aimed at 7-8% growth. In the budget it is ensured as 6.9%. Economists say that this figure may well go up.
Agriculture, horticulture, aquaculture, floriculture, afforestation, dairying and agro-processing were given highest priority in the CMP. Budget-2005 subsidised agriculture by Rs 16,254 cr. Rural infrastructure development also took a mark in the budget by 60 lakh additional houses for rural poor, electricity to 1.25 lakh villages, Telephone connectivity to 66,822 villages, Loans for rural areas to increase by 30 pc, rural infrastructure fund of Rs 8,000 cr and installation of National rural health mission.
Education, was promised to be given a 6% of the GDP in CMP. Budget-2005 granted Rs 18,337 cr with supplementary proposals like Mid-day meal allocation, Sanitation, Special schemes for SC/ST students and accomplishment of world class university in the form of IISC. Water, the major issue of most of the southern states got its importance with improved and increased drinking water supply projects like Rajiv Gandhi drinking water mission etc. Mr.P.Chidambaram seems to have rightly inputed, taken neat decisions and had driven the way for all.
The notable changes are the tax rates, prices of cigarattes and tobacco products, relaxing the customs duty on LPG and kerosene, the reforms brought in textile industry and the banking sector. The point which caught the eyes of most is the tax on withdrawals. You have to pay a tax of Rs.10 for every withdrawal of Rs.10,000. This means you are supposed to pay tax for the money for which you have already paid tax. As everything has loopholes, our finance minister had made one in his. Clarifications and motives behind this proposal also were not encouraged by him.
The needs behind the investments of a common man were asserted. If you have invested money in the saving schemes for the purpose of tax rebates, from now you will be investing for the sake of their purpose. Like if you invest in LIC you are investing only for your insurance and not for the sake of tax rebates. It is a good idea but the life of LIC is in a critical position after the budget. May be, it might also be insured as well :-).
Everything is declared and done well. But what is the gunpoint? What are the bodies which are going to be pierced with the bullets?. Surely the oppositons. When NDA was in governance, it was let down by its allies and suffered setback through its economic reforms. But, Budget-2005 has proven that for coalition government its your intelligence needs to play rather than your politics. Rightly so, Indians as said should be brave and intelligent. Proof Mr.P.Chidambaram