Days ahead of the Budget, the government conceded the GDP growth rate had slowed to about seven per cent but said it was not bad, considering the state of the world economy. Halfway through its term, the government said it would try to achieve eight-nine per cent growth in the shortest possible time.
“Inflation, particularly in food articles, has been a major challenge in many countries, including India,” President Pratibha Patil said in her addresses to the joint session of Parliament, marking the start of the Budget session, in New Delhi on Monday.
“Rising global prices of commodities, industrial materials and fuels have contributed to inflation. The government has taken several measures to ease the supply constraints, like reduction in import duties and a calibrated ban on exports. In order to ease the pressure of high international prices on fuels, Custom duty on crude oil and import duty on petrol and diesel has been reduced. Strong policy actions by RBI and effective measures by the Government of India have yielded results. Inflation in primary food articles fell sharply, giving relief to the common man. General inflation has also eased.”
| HIGHLIGHTS OF PRESIDENTIAL ADDRESS |
| * New Double Taxation Avoidance Treaties on the anvil |
| * Better implementation of transfer pricing, international taxation provisions |
| * Higher Education Credit Guarantee Authority to give loans via risk-pooling |
| * Projects to award 7000 km of roads |
| * New Civil Aviation Authority and independent Air Accident Investigation Bureau on cards |
| * National Electricity Fund for interest subsidy on loans disbursed to the State Power Utilities |
| * Income tax & excise engaged in online deliveries; others to follow |
The government emphasised everything it had done to fight graft. It listed the Bills it had tabled or was about to table: the Public Interest Disclosure and Protection of Persons Making the Disclosure Bill, the Prevention of Bribery of Foreign Public Officials and Officials of Public International Organisations Bill, Citizens’ Right to Grievance Redress Bill, The Judicial Standards and Accountability Bill and The Lok Pal and Lok Ayuktas Bill.
Ironically, the same day President Patil announced all these measures in her customary address to the two Houses of Parliament, Minister for Parliamentary Affairs Pawan Bansal said the Lok Pal Bill amendments had lapsed and would have to be introduced afresh, virtually ruling out the possibility of the Bill being passed in the first half of the Budget session.
The government emphasised the enactment of the Benami Transactions (Prohibition) Act, amendment of the Prevention of Money Laundering Act, the setting up of a special committee to examine measures to strengthen laws to curb black money generation in the country, and commissioning of studies by independent agencies to assess the quantum of black money inside and outside the country.
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Weeks after the Vodafone order by the Supreme Court — which distinguishes between tax avoidance and tax planning and has long-term implications in taxing foreign companies on Indian transactions — the government said it was looking at the rules afresh. “The operationalisation of new Income Tax Overseas Units, signing of new Double Taxation Avoidance Agreements and new Tax Information Exchange Agreements and better implementation of Transfer Pricing and International Taxation provisions were on the anvil,” the President said.
Livelihood security and affirmative action continued to be the government’s fundamental socio-economic anchor, it said.
After right to education, a National Vocational Education Qualification Framework is being developed to set common principles and guidelines for a nationally recognised qualification system along with skill development programmes.
A Higher Education Credit Guarantee Authority for providing limited credit guarantees through risk-pooling for educational loans is to be announced.
The government claimed the National Rural Health Mission had led to a decline in the infant mortality rate from 58 per thousand live births in 2005 to 47 in 2010 and the maternal mortality ratio from 254 per 100,000 deliveries in 2004-2006 to 212 in 2007-2009. It said polio had been “almost eradicated” from the country.
“Universal access to free generic essential medicines in public health institutions in a phased and time-bound manner will be ensured.”
The President said the government was working to end the shortage of human resources in health sector. “Over the last three years, there has been a 26 per cent increase in MBBS seats and 62 per cent increase in postgraduate seats,” according a copy of Patil’s speech.
The President also announced the expansion of the Rashtriya Swasthya Bima Yojana. Legislation is being drafted to amend the Child Labour (Prohibition & Regulation) Act to prohibit employment of children under 14 and to protect the livelihood of street vendors.
The speech mentioned the highest growth in agriculture in recent times: 6.6 per cent during 2010-11. Records were set in the production of foodgrain, fruits and vegetables, oilseeds and cotton in 2010-11. “During 2011-12, the minimum support prices of selected agricultural commodities were raised by 10 to 40 per cent over the previous year.”
The President said credit to agriculture reached about Rs 4,60,000 crore in 2010-11, 22 per cent above the target, and was set to reach Rs 4,75,000 crore in 2011-12. In the speech, she promised the National Food Security Bill along with the computerisation of the public distribution system in the states.
It listed several departments, including income tax and excise, that had begun online deliveries.
It announced it had put Aadhaar in place but did not spell out when it would be rolled out.
The government also said the efficient and automated delivery of public services with minimum human intervention was one of the keys to reducing corruption.
The President said the framing of the General Anti-Avoidance Rules and Controlled Foreign Company Rules had been taken up under the proposed Direct Taxes Code.
She said the Goods and Services Tax needed political consensus but once it came about, it would give a major boost to the economy by rationalising indirect taxes and giving full input credit.