Speech of
Shri P. Chidambaram
Minister of Finance
22nd July, 1996
PART B
79. Now, I turn to my tax proposals.
80. The good news is there are no new direct taxes save one
and even that solitary new tax, I am confident, will be almost
universally welcomed.
81. There are pressing demands from all sections of society
to raise the threshold limit for personal income-tax from the
existing level of Rs.40,000 to at least Rs.60,000. Each increase
of Rs.1,000 in the threshold limit will cost the exchequer Rs.150
crore and, since 77.5% of this loss will be borne by the States,
any major concession on this front will put a severe strain on
the States' financial resources. Besides, when the direct tax
base is already narrow - only 110 lakh persons pay income-tax -
no Finance Minister can afford to let 20 or 30 lakhs of them go
out of the net. However, I accept the need to provide relief to
the assessees in the first tax bracket, especially the salaried
class. I propose to do so in two ways: first, I propose to
reduce the income-tax rate for the first bracket from 20 per
cent to 15 per cent. This benefit will be available to all
assessees. I also propose to raise the standard deduction from
Rs.15,000 to Rs.18,000 for salaried employees having an income
upto Rs.60,000. Thus, a salaried employee with an income of
Rs.60,000 per year, making the minimum contribution to his
provident fund, will now pay no tax at all. If he has no savings,
he will still pay only Rs.300.
82. We owe a special consideration to our senior citizens.
At present, senior citizens benefit from a special tax rebate of
40% upto an income level of Rs.100,000. I propose to raise this
to Rs.120,000.
83. House-owners, residing in their own houses that have been
financed by borrowing, deserve relief. The deduction of interest
payments of Rs.10,000 allowed to them from their income from
property is proposed to be raised to Rs.15,000.
84. As another relief measure, I propose to raise the limit
under section 80D of the Income-tax Act for deduction in respect
of insurance on the health of the individual and his family
members from Rs.6,000 to Rs.10,000.
85. I have already mentioned the new scheme of personal-cum-
family pension being introduced by LIC. In order to encourage
savings in this form, I propose to allow the contribution to the
pension fund to be deducted from taxable income upto a limit of
Rs.10,000 per annum. I also propose to exempt the income of
such a pension fund in the LIC from the levy of income-tax.
86. At present, a five year tax holiday is available under
section 80-IA to enterprises engaged in developing, maintaining
and operating infrastructure facilities such as roads, highways,
bridges, new airports, ports and rail systems. I propose to
extend this incentive to investment in irrigation, water supply,
sanitation and sewerage systems.
87. I also propose to provide a five year tax holiday under
section 80-IA of the Income Tax Act to companies exclusively
created to participate in research and development activities. I
am also simplifying the existing procedure for giving weighted
deduction under section 35(2AA) of the Income-tax Act on sums
paid for scientific research to a National Laboratory or a
University or an Indian Institute of Technology by deleting the
condition of approval by an outside body.
88. Infrastructure funds have become an important source of
capital to finance infrastructure projects. In order to
encourage such funds established to mobilise resources for
financing infrastructure facilities, I propose to exempt them
from income-tax. Any dividend, interest or long-term capital
gains of such funds or companies from investments in the form of
shares or long-term finance in any enterprise set up to develop,
maintain and operate an infrastructure facility will be free from
income tax.
89. I also propose to allow investment in approved debentures
or equity shares of public companies as eligible for tax rebate
under section 88 if the proceeds of such public issues are
applied to create a new infrastructure facility or to generate or
distribute power. In the case of such investment, the limit of
Rs.60,000 under section 88 will be raised to Rs.70,000.
90. Corporate tax rates have been reduced and simplified over
the past few years and the results have been very encouraging
with a significant increase in corporate taxes as a percentage of
GDP. However, there are two issues which need to be addressed.
The first is the promise made in the past that the corporate
surcharge will be temporary. The other is the phenomenon of zero
tax companies which, according to many observers, reflects an
excessive degree of laxity in the tax regime. I propose to
respond to the two issues as follows :
(i) I am reducing the rate of surcharge on
corporation tax from 15% to 7.5% and hope to take
a similar step in my next budget. The reduced tax
burden will benefit all companies big and small.
(ii) I propose to introduce a 'Minimum Alternate Tax'
(MAT) on companies. In a case where the total
income of the company, as computed under the
Income Tax Act after availing of all eligible
deductions, is less than 30 per cent of the book
profit, the total income of such a company shall
be deemed to be 30 per cent of the book profit and
shall be charged to tax accordingly. The
effective rate works out to 12 per cent of book
profit calculated under the Companies Act.
Companies engaged in the power and infrastructure
sectors will, however, be exempted from the levy
of MAT.
91. As a step towards achieving a level playing field for
Indian companies vis-a-vis the foreign companies, I propose to
reduce the tax on long-term capital gains in the case of domestic
companies from 30 per cent to 20 per cent.
92. In order to encourage savings and to channelise savings
into investments in priority sectors of the economy, I propose to
exempt from tax long-term capital gains if the net consideration
received or accruing from the transfer of the capital asset is
invested in specified assets for a period of three years or,
alternatively, if the entire capital gains are invested in
specified assets for a period of seven years. The assessee will
now have a choice of two new savings instruments.
93. I also propose to allow depreciation in the case of
fractional ownership of assets because of the need for joint
financing of big, capital intensive projects by a consortium of
financiers having fractional shares in the assets.
94. In order to promote efficiency in industry, I propose to
provide that unabsorbed depreciation will be carried forward for
a period of eight years only in the same manner as business
losses.
95. The practice of sale-and-lease-back of assets results in
passing of very high depreciation to the leasing concerns. This
needs to be curbed. Hence, I propose to provide in the Income
Tax Act that in case of sale-and-lease-back transactions, the
written down value of the asset, in the hands of lessee, who was
the previous owner, will be treated as cost in the hands of the
lessor. This measure, while not affecting bonafide transactions,
will prevent loss-making concerns from indulging in unhealthy
trade-off of depreciation.
96. I find it unreasonable that commercial properties, not
used by the assessee as his business, office or factory premises,
should be outside the levy of wealth-tax. Accordingly, I
propose to plug this unintended loophole and levy wealth-tax on
such commercial properties.
97. Other measures of tax relief proposed by me include -
(i) Allowing a special deduction of Rs.15,000 to the
patient or guardian of a patient of protracted diseases
like cancer or AIDS involving considerable expenditure
on treatment.
(ii) Exempting under section 10(24) of the Income Tax Act
the income of an Association of Registered Trade
Unions.
(iii) Extending 100 per cent deduction under section 80G of
the Income Tax Act to -
(a) Donations made to Illness Assistance Funds
established by the Central government and the
State governments to meet the medical expenses of
the poorest of the poor;
(b) Donations made to State and National Councils of
Blood Transfusion recently set up by the Ministry
of Health and Family Welfare; and
(c) Donations made to the three funds established by
the armed forces of the country. These are the
Army Central Welfare Fund, The Indian Naval
Benevolent Fund and the Air Force Central Welfare
Fund. This is my way of saluting the brave
officers and jawans of our armed forces.
98. As a part of our obligation to SAARC I am exempting from
income tax the income of SAARC Fund for Regional Projects (SFRP).
99. In order to promote industrial development in the North-
Eastern region of the country, a North-Eastern Development
Finance Corporation was established in August, 1995. I propose
to exempt its income from tax.
100. These proposals are likely to result in an
improvement of revenue under direct taxes which is estimated at
Rs.912 crore.
101. I shall now come to the proposals relating to indirect
taxes.
102. Over the last few years steps have been taken to reform
our indirect tax structure by reducing the number of rates,
removing exemptions and by switching over to ad-valorem rates.
On the customs side the peak rate of duty was reduced to 50% in
1995-96 accompanied by reduction in rates down the line in
respect of all commodities. Central excise duties were also
revamped and moved closer to a Value Added Tax with the
introduction of Modvat for capital goods and extension of input
credit facilities to almost all items necessary for the
manufacture of goods. These changes have contributed to the
growth in industrial production, simplified the tax structure and
brought about greater transparency. They have also led to strong
growth in revenues, with indirect tax collections increasing by
19 per cent in each of the last two years, in spite of
substantial reduction in rates. The Common Minimum Programme
mandates the government to continue with tax reforms and I
propose to do so.
103. Keeping in view the twin objectives of making our
industry globally competitive and providing it reasonable levels
of protection in the transitional period, I propose to take
measured and calibrated steps in the matter of customs tariffs.
104. The salient features of my proposals are-
* Reduction in customs duties on crude oil and other
basic petrochemical intermediates.
* Reduction in the rates of customs duties on raw
materials and inputs such as chemicals, plastics,
natural rubber and ferrous and non-ferrous metals.
* Substantial reduction in customs duties on raw
materials and components required for giving a thrust
to the electronic goods sector.
* Reduction in the rate of duty on computers for
giving a boost to the software industry.
* Reduction in import duty on selected machinery to
modernize the textiles and garment sector.
* Removal of several anomalies in duty rates.
* Unification of rates on similar items in order to
substantially reduce disputes on classification and on
rates.
* Retention of only such exemptions which are necessary,
for the present.
105. India has become a major producer and exporter of
chemicals. This industry has shown a healthy growth in the last
two years. This is an area in which India can exploit its
potential of trained technical manpower and become a leading
nation of the world in the production of chemicals. To achieve
these objectives, I propose to take the following steps:
* Reduction in the rate of duty on crude oil from 35% to
25%.
* Reduction in the rate of duty on bitumen from 30% to
10%.
* Unification of rates at 10% on petro chemical building
blocks such as cumene, toluene and cyclohexane.
* Reduction in the rate of duty on chemicals, both
organic and inorganic, from 50% to 40%.
106. Our textile industry employs millions of people. It is
necessary to modernise it and provide an environment in which it
can grow rapidly. I propose the following measures:
* Reduction in the import duty on rayon grade wood pulp
from 25% to 5%.
* Reduction in the import duty on acrylonitrile
from 20% to 10%.
* Reduction in the rate of duty on DMT, PTA and MEG from
35% to 25%; however in the case of caprolactum the
revised duty will be 30%.
* Reduction in the rate of duty on artificial and
synthetic fibres from 45% to 30%.
* Unification of the rates of duty on nylon filament
yarn, polyester filament yarn and viscose filament yarn
from the existing levels of 45% and 40% at 30%.
107. I also propose a major restructuring of excise duties in
the textile sector, extending the benefit of Modvat, to which I
shall come a little later. I am confident that with these
measures our textile industry will grow from strength to strength
in the coming years.
108. Our power plants face a shortage of coal on account of
growing demand and better utilisation of installed capacity. I
propose to reduce the rate of duty on non-coking coal from 35% to
20%. I also propose reduction of duty on coke from the existing
level of 25% to 20%.
109. Our plastics industry is coming of age. I propose a
reduction of duty on plastics from 40% to 30%. Further, on
articles of plastics I propose a reduction from the existing
level of 50% to 40%.
110. In regard to rates of duties on drugs and
pharmaceuticals, I propose to retain the zero rate of duty on
life saving drugs. I also propose to reduce the rate of duty on
all other allopathic medicines from 50% to 40%. In order to make
available veterinary drugs commonly used I propose to reduce the
rate on specified veterinary drugs from 15% to 10%.
111. There has been a persistent complaint from industry that
customs duty on metals is very high and this makes it difficult
for downstream industry, especially capital goods, to be
competitive. Industry has been demanding that the rate of duty on
metals should be brought down drastically. However, realising the
need to provide adequate time to our metals industry to adjust
itself to global competition, I propose a modest reduction
from 35% or 40% at present to a peak rate of 30% on all metals
except nickel and aluminium. On unwrought aluminium and unwrought
nickel I propose to retain the current level of 10% and 20%
respectively. On wrought aluminium I propose to reduce the duty
from 25% to 20% and on wrought nickel from 30% to 20%.
112. While I do not wish to tamper with the rate of duty on
machinery which stands at 25%, I propose a reduction of duty on
signaling and safety equipment for railways, airports, sea ports
etc. from the current level of 50% to 25%.
113. The last three years have witnessed a tremendous growth
in our electronic industry which has been the result of
enterprise as well as the stimulation provided by sharp reduction
in customs duties. In order to maintain this trend, I propose
the following changes:
* On raw materials, from the existing 15% to 10%
* On components, from 25% to 20%.
* On glass shells for colour TVs, from 30% to 25%.
* On colour picture tubes, from 40% to 30%.
* On computers and computer peripherals, from 40% to 20%.
* Finished goods will continue to attract 50% rate of
duty.
114. With a view to encourage sports in the country, I also
propose to reduce import duty on sports goods from 50% to 30%.
115. In order to give relief to professional press
photographers I propose to allow them to import free of duty
photographic equipment upto Rs.1 lakh. A similar concession is
also being extended to accredited journalists for import of
personal computer, typewriter and fax machine.
116. Telecommunication is a growing sector and will turn out
to be the life-line of our economy. The existence of an
efficient telecommunication net work is a pre-requisite for
accelerated economic growth. In order to give a boost to the
efforts being made by the Department of Telecommunications, I
propose that the duty on parts and sub-assemblies of
telecommunication equipment be reduced from 35% to 30% and on
finished equipment from 50% to 40%. In order to avoid the
temptation to smuggle cellular phones, pagers and trunking
handsets, I propose to reduce the customs duty on them to 30%.
117. Upgradation of medical standards in the country is
extremely important. I, therefore, propose to reduce the rate of
duty on specified equipment, not generally made in India, and
their parts from 15% to 10% and on other medical equipment from
40% to 30%.
118. Edible oils now carry a rate of duty of 30%. This is an
important item of daily food for the masses and we have a
chronic shortage of edible oils in the country. I propose to
reduce the import duty on edible oils from 30% to 20%.
119. Mr. Speaker, Sir, earlier in my speech I dwelt on the
dire need to step up investment in infrastructure. I had also
detailed the sectors to which I propose to make large
allocations. I have to raise resources to meet these
requirements. I intend to ask importers to share the burden of
building the infrastructure in this country because, ultimately,
it will help raise production and enhance competitiveness. I,
therefore, propose a levy of 2% as special customs duty on all
imports except those that carry nil rate of duty or are imported
at nil rate of customs duty for export production under the
various duty free licences. This levy will not apply to gold and
silver imported by eligible passengers or under special import
licences. This is likely to yield about Rs.1600 crore in the
current year.
120. Importers will be happy to know that the Reserve Bank of
India is announcing today the withdrawal of the interest rate
surcharge of 25% on import finance imposed in February, 1996.
121. I now come to my proposals regarding central excise. A
large number of countries in the world today have a value added
tax system which has been recognised to be the most efficient
form of commodity taxation. I am glad to note that some State
governments are moving towards the value added tax system. The
last few years of reforms have taken us closer to having a
Central VAT, but there are still certain legal obstacles.
122. Our central excise structure still has 11 ad-valorem
rates. The rates range from 0 to 50 per cent. Ideally there
should be only four rates of excise duties -- zero, a lower rate
of excise duty on goods of mass consumption, a single normal rate
on all other goods and a higher rate on luxury items. It is
absolutely necessary for us to move towards this rate structure
so that we put an end to wasteful litigation and have a
transparent and simple tax structure. It was not possible in the
time available to me in preparing this Budget to achieve this
goal in the current year. However, I propose to take the first
step this year and I am confident that we will achieve a four-
rate excise duty structure in another year or two.
123. I propose to integrate the tax on the textile sector
with the mainstream of central excise duties by introducing the
Modvat principle in this sector. Hon'ble Members are aware
that at present excise duties are levied at the fibre and yarn
stage and there is only an additional excise duty, in lieu of
sales tax, on fabrics. This is one of the most inefficient ways
of taxation as it results in very high duties on inputs, which
encourages evasion; it does not capture value addition; and it
denies the industry an opportunity of claiming Modvat input
credit on capital goods, chemicals and yarn. While modernisation
of other industries is taking place speedily, our textile
industry has not been able to participate fully in this process
because of this lopsided tax structure. I, therefore, make the
following proposals.
124. I propose to reduce the excise duty on yarn in the case
of polyester filament yarn from the current level of 50% to 40%
and unify the rates on other yarn at 20%, except nylon filament
yarn and cotton yarn for which the present rates of 30% and 5%
respectively will be retained. In order to provide Modvat for
the textile sector, I propose to impose a basic excise duty of
5% on cotton fabrics and 10% on other fabrics which will be
collected at the processed fabric stage. The processors would be
in a position to Modvat the duty paid on yarn imputed on the
basis that yarn accounts for 50% of the value of the finished
fabric. I have adopted a simple procedure of imputed value to
avoid the imposition of a basic duty on grey fabrics which are
manufactured by thousands of powerlooms. Such powerlooms will,
therefore, continue to be outside the excise net. Composite
mills and textile processors will be able to avail themselves of
Modvat facilities hitherto not extended to them. This
restructuring of excise duty, together with the substantial
reduction in customs duties on selected machinery and on inputs
for the textile sector, should provide a major boost to the
textile industry. I believe that this will also simplify the
calculation of drawback rates for garment exporters.
125. In my proposals on customs duties, I have proposed a
reduction in customs duty on crude oil from 35% to 25%. This is
part of a restructuring and rationalisation of the duty structure
aimed at encouraging efficient refineries and enabling me to
shift the duties from the input stage to the product stage. I
propose to make up the loss on customs duty by adjusting the
excise duty upward from 10% to 15% on all petroleum products
except LPG and kerosene. The proposed changes in customs and
excise duties taken together are revenue neutral and will have
no impact on the administered prices of petroleum products.
126. Honourable Members are aware that almost all articles of
mass consumption are already exempt from excise duty and a large
number of other widely consumed articles carry a rate of only
10%. I propose to exempt some more articles from excise duty.
They are:
(a) Vanaspati and margarine;
(b) Writing and printing paper supplied to all State Text
Book Corporations;
(c) Animal fats and oils;
(d) Asbestos fibre;
(e) Metallic ores; and
(f) Tapioca products.
127. I propose to reduce the duty on the following articles:
(a) Tooth paste, from 20% to 10%;
(b) Detergents, from 30% to 25%;
(c) Cartons, boxes and bags made of paper and
paperboard, from 20% to 10%;
(d) Glassware produced by semi-automatic process, from
20% to 10%;
(e) Glassware used for table, kitchen etc., from 15%
to 10%;
(f) Articles of asbestos cement, from 25% to 20%; and
(g) Ceramic articles, other than glazed tiles, from
20% to 15%.
128. I also propose to raise the exemption limit for footwear
from Rs.50 to Rs. 75 per pair.
129. The rates of excise duty on motor vehicles are not in
consonance with the accepted classification of such vehicles. I
therefore propose the following rationalisation:
(a) Duty on motor cars and other motor vehicles principally
designed to carry not more than six persons, excluding
the driver, will remain unchanged at 40%.
(b) Duty on motor vehicles principally designed to carry
more than 6 persons but not more than 12 persons,
excluding the driver - 20%
(c) Duty on other motor vehicles for transport of persons
or goods - 15%.
There is no change in the duty on two-wheelers or tractors.
130. If there is one area in which a Finance Minister can
both tax and please, it is cigarettes. Today, however, I shall
please you only in a small way by proposing modest increases in
the specific duties on cigarettes ranging from about 5% to 7[%.
In the case of non-filter cigarettes, not exceeding 60 mm in
length, popularly called mini cigarettes, I propose to raise the
tax by 25% from Rs.60 per thousand to Rs.75 per thousand.
131. In order to encourage R & D efforts in India I propose to
exempt goods developed and patented in India and concurrently in
specified countries from the levy of excise duty for a period of
three years. I am also rationalising the exemption from customs
duty for import of equipment and consumables for R&D
institutions.
132. I have proposed the addition of potassium chlorate,
copper powder and cigarette lighters to the list of goods
eligible for duty exemption under the SSI scheme. The reduction
in import duties proposed elsewhere will also substantially
benefit the small scale industries. In order to benefit hundreds
of small scale manufacturers of matches I have decided to
dispense with the physical control system operating on them and
introduce the self- removal procedure freeing them from the day
to day bother of control. I hope SSI match units will respond
with substantial increase in payment of excise duties.
133. I have proposed rationalisation of rates and exemptions
both in customs and excise in several other areas. I would
not like to take the time of the House by going into these
details.
134. Our excise procedures are outdated and not in tune with
the times. They need to be modified. They should encourage
voluntary compliance with tax laws by the tax payers. With
effect from 1st October,1996, assessees would no longer be
required to furnish copies of invoices along with the monthly
returns. All that they would be required to furnish to the excise
department will be a simple Return indicating the duty paid on
self- assessment basis. Wherever possible the assessees'
computers could also be linked to the Department's computers for
on line assessment.
135. I also propose to introduce a scheme of selective audit
by the excise officers and dispense with the existing scheme of
routine examination and checking of returns and documents
furnished by the assessees. This scheme would also come into
force from 1st October, 1996.
136. I am sure that these changes would be widely welcomed by
the manufacturers who are required to pay excise duties and I
expect them to comply with the laws faithfully. However, I wish
to affirm government's resolve to deal with tax evaders sternly.
I am proposing suitable changes in the Customs and Excise Acts to
provide for mandatory penalty, together with interest, for
evasion of duties on account of fraud, collusion, mis-statement
or suppression of facts. Henceforth, the mandatory penalty for
evasion of duty on these counts shall be equal to the amount of
duty evaded. Tax evaders would also be required to pay interest
starting from the first day of the succeeding month in which the
duty evaded ought to have been paid and also face criminal
prosecution.
137. Mr. Speaker, Sir, the Central Excise and Salt Act, 1944,
reminds us of the colonial era when excise duty was collected on
salt. There is no excise duty on salt and hence the reference to
salt is outdated. I propose to delete all references to salt.
138. The Modvat scheme which provides for duty credit on
inputs and capital goods has been liberalised considerably over
the past few years. Still, there are problems about the coverage
of certain inputs and capital goods. I propose to clarify the
scope of eligible capital goods by specifying the heading and
sub-headings of the tariff relating to capital goods in the
Modvat Rules. It is also a matter of concern that there is
misuse of the Modvat credit scheme. At present, Modvat
invoices can be issued by any dealer registered with the excise
department and this facility is reportedly being misused.
Therefore, I propose to restrict the issue of Modvatable
invoices by dealers upto two stages. Suitable provisions are also
being made in the Modvat Rules for charging of interest in the
case of wrong availment of Modvat credit and for mandatory
penalty for misuse of Modvat facility.
139. The tax on services has come to stay. With a view to
widening the tax base, I propose to bring in advertising
services, radio paging services and courier services under the
tax net. The tax on these services will be at the rate of 5%.
While this measure is expected to yield Rs.150 crore in a full
year, I am taking credit only of Rs.70 crore in the current year.
140. My proposals relating to reduction in customs duties are
estimated to result in a loss of Rs.650 crore in the remaining
part of the current financial year. However, by taking into
account receipts from the special customs duty estimated to be
Rs.1600 crore, there will be a net gain of Rs.950 crore in
customs revenue.
141. In the case of excise duties, including additional
excise duties, a gain of Rs.760 crore is estimated. Of this,
the States are likely to get Rs.384 crore as their share of
excise duties.
142. I now have something to say on behalf of my colleague,
the Minister of Communications. Postal rates, some of which
were last revised in 1990, do not meet even the direct cost
of most of the services resulting in increasing budgetary
support. Notwithstanding this, no change in the rates of
ordinary postcard, letter, parcels and other postal services is
being proposed. A modest increase is proposed only in respect of
two services which are used for business and commercial purposes.
The rate of the printed post card is being increased from 60p. to
Re.1 and the registration fee is being increased from Rs. 6 to
Rs. 8. It has also been decided to introduce a new category of
postcard, called Competition Postcard, which alone may be used
for responding to any competition organised on or through
television, radio, newspapers or magazines. It is proposed to
remove the unintended subsidisation by fixing the tariff for this
category of postcard at Rs.2. The changes will take effect from
a date to be notified after the Finance Bill is passed. The
revisions proposed are estimated to yield a modest revenue of
Rs.38 crore in 1996-97, still leaving a large postal deficit.
143. Copies of notifications giving effect to the above
changes in customs and excise duties will be laid on the Table of
the House in due course.
144. My budget proposals have many implications both for
the expenditure side and the revenue side. However, Hon'ble
Members will be pleased to know that the end result is
satisfactory. The revenue deficit in 1996-97 is placed at
Rs.31,475 crore or 2.5% of GDP which is significantly lower than
Rs.33,331 crore in RE 1995-96 or 3% of GDP. The fiscal deficit
comes to Rs.62,266 crore in 1996-97, which is lower than the
figure of Rs.64,010 crore in RE 1995-96. As a percentage of GDP,
the fiscal deficit is 5% in 1996-97 compared to 5.9% in the
previous year. I hope to do better in my next budget and move
along the path of reducing the fiscal deficit to below 4%.
145. Mr. Speaker, Sir, at the end of this exercise, I ask
myself what is a budget about? While it is a measure of the
health of the economy, it is also a mirror to the travails and
aspirations of the people. 2000 years ago, Saint Tiruvalluvar
laid down the golden rule for the King's Ministers:
"Iyattralum, eettalum, kattalum, katta
Vakuthalam Vallath Arasu"
(To be able to increase wealth, to lay it up and guard,
And also well to distribute it, marks a royal lord.)
146. I have made an attempt to raise revenues without putting
any burden upon the poor, to allocate large resources for
agriculture, irrigation, infrastructure and the social sector, to
provide more funds for basic minimum services, to give tax
reliefs to the salaried and the middle classes and to promote
savings and investment. I have strived to serve the seven
objectives that I declared at the outset.
147. The Common Minimum Programme is absolutely right when it
says that the country's GDP needs to grow at over 7% per year in
the next 10 years in order to abolish poverty and unemployment.
148. I believe that our economy is on a high growth curve.
Wisdom dictates that we remain on that curve. In order to do so,
we need more reforms, not less. We need more resources, not less.
We need more discipline, not less. And we need more compassion,
not less. If we remain true to the Common Minimum Programme, we
shall overcome our difficulties and take India to the frontline
of the nations of the world. This budget, my maiden effort,
attempts to blend - I hope in the right proportions - courage and
compassion, reform and restraint and growth and social justice.
149. Mr. Speaker, Sir, with these words, I commend this
budget to this august House.
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