The BJP yesterday described the Union budget as anti-poor, anti-farmer, anti-rural sector, anti-small scale sector and anti-unemployed. It also said the bidget was inflationary.
The budget is friendly towards capital markets, tax payers and foreign institutional investors (FIIs), BJP spokesperson Yashwant Sinha said yesterday, while articulating the partys first formal reaction to the budget. The reaction has been prepared by the BJPs economic cell.
The BJP is convinced that the euphoria created by the budget will be short-lived, he said.
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Finance minister P Chidambaram has gone out of his way to please the vocal and the powerful sections of society and ignored the needs of the weaker and voiceless sections, he alleged.The fiscal deficit of 4.5 per cent of the GDP may satisfy the International Monetary Fund (IMF), but in actual term the deficit was much more, Sinha pointed out, adding that Rs 65,454 crore is the highest deficit ever. Out of this, Rs 16, 000 crore would be met through the printing of currency notes, which would be lead to inflation.
The government has put no curb on non-plan expenditure and has come down heavily on plan expenditure, he said, pointing out that over the years the governments planned and capital expenditure has been declining and the non-plan and revenue expenditure has been on the increase. Such a situation was not congenial to production and growth, he said.
The party found the budgetary allocation for infrastructure to be highly inadequate and incapable to meet the countrys power requirement by the end of the nine plan period. Power generation capacity has to be increased by at least 40,000 megawatt, of which 30,000 would be in the public sector, Sinha pointed out. Basing his observations on the Rakesh Mohan committee report, he said the country needed an investment of Rs 150, 000 crore in five years.
Against this, the provision for power in the budget is a measly Rs 7, 000 crore.
He criticised the budget for ignoring the agricultural and the small industry sectors and the defence. By dereserving 14 items from the list for small scale industries, which also include products like biscuits and ice creams, and allowing entry of foreign multinational corporations into these products, the finance minister has done a great disservice to the small scale sector. The step has clearly reflected the priorities of the United Front government, which he said is concerned more with the quality of biscuits and ice creams than with increase in employment.
Sinha described the voluntary disclosure scheme as the budgets worst feature and said the BJP is strongly opposed to the scheme as it would give a kind of amensty, nay encouragement, to scamsters. He said the scheme mocks the honest tax payer and makes him look foolish. Not only has the honest tax payer paid higher tax on his earnings, he has paid it on time and honestly. As against this the tax evader will pay only 30 per cent tax on his ill-gotten wealth while even the corporates will pay at the higher rate of 35 per cent.
The BJP also opposed the reduction of customs duties across the board. Such reductions were against the essence of Swadeshi and were not good for Indian industries, the BJP spokesman said. As the country is ill-equipped to deal with competition from abroad, such steps would cast a long shadow on domestic industries, he added.