Huge Budget allocations to a single state flayed

Specific allocation of huge amounts to a particular state can cause conflicts among states especially when India has so much cultural and social diversity.

The government must realise that no political interest is greater than the national interest, said Dinesh Vyas, senior advocate and tax expert.

The results of the last Parliamentary election has proved that farmers, labours and youth can not be neglected. This has also resulted in the latest Budget revolving around the interests of the common man, he said.

Finance minister P Chidambaram has allocated Rs 3,225 crore to Bihar in the Union Budget 2004.

He was addressing the commerce and industry fraternity over the issues and implications of the Budget 2004-05 in a public meeting organised by the Gujarat Chamber of Commerce and Industry (GCCI) in Ahmedabad on Saturday.

The issue that has not been received much attention is related to the Fiscal Responsibility and Budget Management Act 2003.

In the beginning of the Budget speech, the finance minister proposed to postpone the time limit of eliminating revenue deficit from 2007-08 to 2008-09.

"Now it will be a responsibility of the then government to take care of the revenue deficit. Moreover, it will set a wrong precedent," said Vyas.

The previous government was taking pride with the fact that the Union disinvestment ministry generated over Rs 14,500 crore through disinvestment. But a plan to raise a mere Rs 3,000 crore and provision of Rs 14,329 crore for equity support to the public sector units (PSUs) shows the influence of the Left allies.

"It is important to give direction to PSUs as they have a major role in our economy to play. There is no demand of today's time for the government to remain in the business. The government must think over the strategic disinvestment policy instead of running inefficient and loss making PSUs," said Vyas.

The other important issue of the Budget is the recovery of tax arrears of Rs 87,000 crore. Out of this, Rs 55,000 crore is disputable and the rest Rs 32,000 crore is undisputed amount.

"Non-recovery of undisputed tax amount is the failure on the government's part. Authorities must do tax collection responsibly so as not to do injustice with the honest tax payers," Vyas said.

The success of the Budget lies in the implementation of the commitments made, not in the commitments announced.

Vyas admired the proposals like increase in income tax limit, new tax structure for textile industry, employment and water conservation schemes.