Views in Brief on Interim Budget 2014-15

It is good to observe that the Union Finance Minister P Chidambaram eyeing on ensuing Lok Sabha Poll, did not announce uncontrolled populist measures in the Interim Budget 2014-15. At the same time, he failed to point ways for expansion of Indian economy in near future. In fact he was keen to highlight achievements of UPA-I and UPA-II Government rather than chalking out steps to enhance effectiveness of Government policies relating to social and economic issues in a sustainable form.  

Though subsidies are increasingly becoming burdensome, Finance Minister carefully refrained from taking any steps to rein in subsidy regime on his pre-Poll interim budget. To cut down fiscal deficit from 4.8% to 4.6%, Budget proposed slashing funds for social sectors depriving weaker section of the society. Reduction in social sector spending will hamper expansion of market and put a break in growth. It is observed, spending cut in important ministries and departments like telecom, power, road transport and highways, rural development, women and child development, drinking water and sanitation, health and family welfare, school education and literacy, higher education etc relating to Government's flagship programmes will affect flow of investment and hence will slow down growth. In short, Chidambaram attempted to slash fiscal deficit not by controlling unproductive expenses rather by dimming prospect of prosperity.

Noticeably, corporate sector continued to enjoy Government’s favour. No significant proposals were made for employment generation, but on the contrary, the scope of employment has been shrunk.

Finance Minister P Chidambaram presents Interim Budget 2014-15

Surmounting Challenges, A Major Goal 

While presenting the Interim Budget 2014-15, the Union Finance Minister Shri P Chidambaram said that 2012 and 2013 were years of turbulence for the Indian economy, as they were for other emerging economies. He declared that, on returning to the Ministry of Finance, his primary objectives and concerns were fiscal consolidation, price stability, self-sufficiency in food, reviving the growth cycle, enhancing investments, promoting manufacturing, encouraging exports and quickening the pace of implementation of projects. The Minister added that he is intend on finding practical solutions to certain stressed sectors such as petroleum, power, coal, highways and textiles.

Important points of the Interim Budget 2014-15 are: 

UPA Government has Delivered Above the

Trend Growth Rate, says Finance Minister;

Recent Decline in Growth Rate Arrested

Presenting the Interim Budget for 2014-15 on Monday in Lok Sabha, the Finance Minister, Shri P. Chidambaram has said that the UPA Government, during its two terms, has delivered above the trend growth rate in India. He said that over a period of 33 years, the trend growth rate in India has been 6.2 per cent. Average annual GDP growth during the period 1999-2004 was 5.9 per cent, which is below the trend rate. In the next five year period 2004-2009, it was 8.4 percent and, in the period 2009-2014, it will be 6.6 per cent. Shri Chidambaram said that UPA-I and UPA-II have delivered above the trend growth rate during its tenure. 

Outlining the achievements of the Government during the last ten years, Shri Chidambaram said that food production has increased to 263 million tonnes from 213 million tonnes ten years ago. Similarly, while the installed power capacity was 112,700 MW ten years ago, today it is 234,600 MW. The length of rural roads under the flagship programme PMGSY has increased to 389,578 KM from only 51,511 KM a decade ago. The Central Government will spend five times more on health this year as compared to the expenditure ten years ago. 

Fiscal Deficit to be contained at 4.6 Per Cent of GDP in 2013-14 

The fiscal deficit for the financial year 2013-14 will be contained at 4.6 per cent of GDP. Stating this Shri P. Chidambaram, said that the Current Account Deficit (CAD), that threatened to exceed last year’s CAD of USD 88 billion, will be contained at USD 45 billion. The Finance Minister further stated that about USD 15 billion is expected to be added to the foreign exchange reserves by the end of the financial year 2013-14. 

Shri Chidambaram said that due to the efforts of both the Government and the RBI, the WPI inflation stood 5.05 per cent at the end of January 2014 where as the core inflation was 3.01 per cent. This is lower than the WPI inflation figure of 7.3 per cent and core inflation of 4.2 per cent for the same period last year. The Finance Minister admitted that the food inflation continues to be a matter of concern although it has declined sharply from a high of 13.6 per cent to 6.2 per cent.

Agricultural GDP to Grow at 4.6% During the Current Financial Year 
Foodgrain Production Expected to Touch 263 Million Tonnes 

The Finance Minister informed that in 2013-14, agriculture exports are likely to cross USD 45 billion as compared to USD 41 billion in 2012-13.

Highlighting the achievements made in the area of agricultural credit, the Finance Minister said that agricultural credit is likely to touch Rs 735,000 crore, exceeding the target of Rs 700,000 crore.

An amount of Rs 11,200 crore has been provided for capital infusion in Public Sector Banks (PSB’s) in the Interim Budget 2014-15. Defense allocation has been enhanced by 10%. The Union Finance Minister Shri P. Chidambram said that an allocation of Rs. 224,000 crore has been made for defense as against Rs. 203,672 crore in the last Budget.

Exports Show Recovery and expected to Grow by 6.3 Per Cent in 2013-14. The Finance Minister, Shri P. Chidambaram has indicated a growth rate of 6.3 per cent in merchandise exports during the current financial year with estimated merchandise exports of USD 326 billion.

Adequate Allocation for SC/ST Sub-Plans 

An allocation of Rs. 48,638 crore has been made for the scheduled caste sub- plan and Rs. 30,726 crore for the Tribal Sub-Plan. The Finance Minister said that it is also heartening to note that an allocation of Rs. 97,533 crore has been made towards the gender budget and an allocation of Rs. 81,024 crore towards the child budget.

Volume of lending to the Minority Communities had soared from Rs 4,000 crore in the year 2004-05 to Rs.66,500 crore in the year 2013-14.

Food, Fertilizer and Fuel Subsidies 

The Finance Minister, Shri P. Chidambram presenting the Budget in the Parliament today said Rs. 65,000 crores is provided for fuel subsidy. He said Rs. 115,000 crore has been allocated for food subsidy keeping in mind UPA Government’s firm and irrevocable commitment to implement the National Food Security Act throughout the country. 

Government Steps Up Project Clearances resulting 296 Projects of Rs 660,000 Crore Cleared by January End This Year. 

Direct Taxes Code (DTC) to be put on the website of the ministry for public discussion. Relief to The Manufacturing Sector proposed; Cars and Scooters to be Cheaper. Excise Duty on Mobile Handsets to be restructured. Customs Duty Structure is to be rationalized to encourage production of Soaps and Oleo Chemicals. Production Of Security Paper For Printing Currency Notes Also Gets Encouragement.

Highlights of Railway Budget 2014-15

Achievements / Initiatives

·         Major landmark achievement in National Project of Kashmir –

·         State of Meghalaya and capital of Arunachal Pradesh to be on Railway Map by this fiscal.

·         Gauge Conversion of strategically important 510 km Rangiya – Murkongselek line in Assam to be completed by this fiscal.

·         XIth Five Year Plan Targets exceeded in New Lines (2,207 km) , Doubling (2,758 km) and Electrification (4,556 km), Production of Diesel  (1,288) & Electrical (1,218) Locos and Acquisition of Wagons (64,875)

·         Dedicated Freight Corridors on the Eastern and Western Routes – leading to strategically critical capacity augmentation.

·         Railways met from its own means the total additional impact of Rs one lakh crore due to implementation of 6^th Pay Commission

·         In 2013-14, 1532 km of New Lines, Doubling and Gauge Conversion commissioned.

·         Production commenced at the new factories – Rail Wheel Plant, Chhapra ; Rail Coach Factory, Rae Bareli ; and Diesel Component Factory, Dankuni.

·         Specially designed coaches for adverse weather condition for rail travel in Kashmir.

·         Successful development of Corrosion resistant, lighter wagons with higher pay-load and speed potential upt 100kmph.

·         Railways sportspersons dominate national events by winning titles in 23 disciplines and runners up in 9 disciplines. In various international championships a total of 2 Gold, 4 Silver and 3 Bronze Medals won.

·         Unigauge Policy started in 1992 has converted 19,214 km to Broad Gauge, benefitting several States including Gujarat, Rajasthan, Madhya Pradesh, Maharashtra, Karnataka, Uttar Pradesh, Assam and Tamil Nadu.

Measures for improving Safety & Security

·         No unmanned Level Crossing.   A total of 5,400 unmanned level crossings eleiminated – 2,310 by manning it and 3,090 by closure / merger / construction of ROBs or RUBs.

·         Improved audio – visual warning to road users in advance of approaching trains.

·         Induction of indigenously developed Train Collision Avoidance System

·         Development of ‘crashworthy’ coaches

·         In last five years, offering employment to over one lakh persons in Group C categories and to 1.6 lakh persons in erstwhile Group D categories.

·         Provision of Vigilance Control Device in all locomotives

·         Various measures to prevent fire incidents on trains –

Ø  Fire retardant materials

Ø  Multi-tier protection for electric circuits

Ø  Portable fire extinguishers in coaches

Ø  Induction based cooking to replace LPG in pantry cars

Ø  Intensive checks against explosives and inflammable materials.

Financial Health

·         Rail infrastructure by cost sharing arrangement with State Governments; Karnataka, Jharkhand, Maharashtra, Andhra Pradesh and Haryana agreed to several projects

·         Several Public Private Partnerships (PPP) projects are in the pipeline.

·         FDI being enabled to foster creation of world-class rail infrastructure.

·         Rail Land Development Authority raised Rs 937 crore so far.

Modernisation and Technology Induction

·         High Speed Trains

Ø  Joint feasibility study by India and Japan for Mumbai – Ahmedabad Corridor to be co-financed by Japan International Cooperation Agency

Ø  Business Development Study by SNCF for Mumbai – Ahmedabad corridor.

·         Semi- High Speed Projects

Ø  Exploring low cost option of speeds 160- 200 kmph on select routes

Green Initiatives

·         Railway Energy Management Company becomes functional. Windmill and solar power plants to be set up with 40% subsidy from Ministry of New & Renewable Energy.

·         200 Stations, rooftops of 26 buildings and 2,000 level crossing gates to be covered.

·         Railways bagged 22 out of 112 awards given by the Government.

·         ‘Green Curtains’ along the track close to major stations; Pilot work at Agra and Jaipur

·         Coverage of Bio-toilets in 2,500 coaches and would be increased progressively.

Passenger Friendly Initiatives

·         Overwhelming public response to e-booking of ticket

·         On-line tracking of exact location and running of train movements

·         51 Jan-Ahaar outlets for Janta Meals ; 48 passenger escalators commisionsed at stations and 61 more being installed ; air-conditioned EMU services in Mumbai from July 2014 ; information display system in important trains to indicate stations & arrival time.

·         ‘Upgradation’ scheme extended to AC Chair Car and Executive Chair car passengers.

Demand Management through Dynamic Pricing

·         Premium AC Special train introduced in Delhi – Mumbai Sector with shorter advance reservation period and dynamically varying premium over tatkal fare

Enhancing Market Share

·         Clearing missing links in Carrying Capacity + 8 tonne routes; freight train speeding ; upgradation of rolling stock ; increasing length of trains ; tariff and incentive schemes to encourage traffic to rail and minimizing empty running.

Rail Tariff Authority

·         Independent Rail Tariff Authority set-up to advise on fixing of fares and freight, to engage all stake-holders

Information Technology

·         Initiatives taken include – proliferation of cash accepting Automatic Ticket Vending Machines ; ticketing on mobile phones in unreserved segments ; system update on PNR status; online booking of retiring rooms at important stations ; online booking of meals for selected en-route stations ; introduction of e-forwarding note and electronic transmission of railway receipts for freight customers

Revenue Freight Traffic

·         Loading target of 1047 Million Tonnes for 2013-14 would be surpassed

·         Empty Flow Discount Scheme to be implemented

·         Carrying Capacity + 9 tonne + 1 tonne routes being planned

·         Easing of some restrictions on movement of imported commodities through Containers

·         Carrying capacity of 20 feet containers increased by 4 tonnes

·         Parcel Terminals & Special Parcel Trains with scheduled timings.

·         New policy on parcels to encourage transportation of milk.

·         New concept of ‘hub and spoke’ for parcel business

·         Third party warehousing in Special Parcel Terminals envisaged.

Financial Performance 2012-13

·         Loading of 1,008 Million Tonnes surpassed the R.E. target of 1,007 Million Tonnes

·         Paid full dividend Rs 5,389 crore to General Exchequer

·         90.2% Operating Ratio in 2012-13

·         Repayment in full with interest of Rs 3,000 crore loan from the Government

·         Railway Fund Balances of Rs 2,391 crore

 Financial Performance 2013-14

·         Loading Target raised to 1,052 Million Tonne from B.E. 1,047 Million Tonne.

·         Freight Earnings Target revised to Rs 94,000 crore from B.E. Rs 93,554 crore

·         Stringent Financial control exercised and Ordinary Working Expenses pegged only at Rs 560 crore higher than Budget Estimates, despite various post-budgetary factors

·         Plan Outlay revised to Rs 59,359 crore

·         Operating Ratio likely to be 90.8%

·         Fund Balances to continue to grow to Rs 8,018 crore

Budget Estimates 2014-15

·         Loading target of 1,101 Million Tonnes

·         Gross Traffic Receipts targeted at Rs 1,60,775 crore with Passenger Earnings (Rs 45,255 crore), Goods (Rs 1,05,770 crore), Other Coaching & Sundry Earnings (Rs 9,700 crore)

·         Ordinary Working  Expenses placed at Rs 1,10,649 crore, higher by Rs 13,589 crore

·         Pension Outgo budgeted at Rs 27,000 crore against Rs 24,000 crore for 2013-14

·         The entire Dividend of Rs 9,117 crore to General Exchquer will be paid

·         Fund Balances likely to be Rs 12,728 crore.

·         Operating Ratio budgeted at 89.8%

Annual Plan 2014-15

·         Annual Plan envisaged at Rs 64,305 crore with a Budgetary Support of Rs 30,223 crore , Internal Resources of Rs 10,418 crore and Extra Budgetary Resources of Rs 19,805 crore

·         New Surveys : 19 New Lines & 5 Doubling

New Services

Ø  New Trains

·         17 Premium trains

·         38 Express trains

·         10 Passenger trains

·         4 MEMU

·         3 DEMU

Ø  Extension and Increase in frequency

·         3 Extension of trains

·         3 increase in frequency

No basic facilities, world class pineapples rotting in Tripura

Tripura is famous for pineapples of excellent taste and world class quality. Pity, cultivators have no access to basic infrastructures like proper storage, packaging facilities etc. As pineapple is highly perishable item, lack of these facilities forced farmers into distress sales every year. A possibility of earning foreign currency by exporting high quality pineapples produced in Tripura is dimming because of improper planning and dynamic initiatives by the Government.

A change was expected when NERAMAC, a Government of India (GoI) Enterprise, set up a factory at Nalkata in North district of Tripura nearby 44 NH in 1997. Fitted with modern machineries imported from Japan, Russia and Italy, NERAMAC rekindled hope amongst cultivators. NERAMAC intervenes in sourcing, procuring and marketing horticulture products like pineapples. The organization also extends assistance to farmers under Horticulture Mission Schemes of GoI. Obviously NERAMAC infused enthusiasm among the farmers and pineapple cultivation became main occupation of several ethnic tribes living in the area.

Initially 46 employees were inducted and the factory was supposed to produce 50 MT pineapple juice every day. However, within one year since inception, NERAMAC’s down slide started and poor tribal farmers’ dreams started to be shattered. Inefficient management in running administration, lack of willingness among the officials to support poor farmers etc coupled with massive irregularities and negligence contributed a pre-mature death of NERAMAC’s journey in Tripura and farmers are again forced in selling their produces at throw away prices and rotting rate is exuberantly high. Presently, costly imported machineries of NERAMAC are laying unattended. What a misuse of Government money !!!

Cultivable land shrinks, food grain production expands

Riding on self-sufficiency drive initiated in 2000-01 in Tripura,  food grain production augmented drastically. Owing to population increase coupled with other reasons, availability of cultivable land shrunk remarkably. Population density increased from 62 in 1951 to 350 in 2012 and average per capita land holding trimmed down from 1.25 hector in 1976-77 to 0.56 hector at present. However, food grain production that stood at 2.58 MT during 1970 swelled to 7.30 MT in 2011-12 indicating a 3-fold increase and it increased further during last two years. With increased food grain production, shortage of food grain supply is reduced from 37% in 2000-01 to 12% during current year. 

Analyzing the current production scenario, Officials of State Agriculture Department of Tripura attributed success to proper implementation of Centrally sponsored Rashtriya Krishi Vikas Yojna (RKVY), effective utilization of lands distributed in Forest Rights’ Act, adopting System of Rice Intensification (SRI) method for paddy cultivation, better pest management etc. Availability of high yielding seed variety and improved fertilizers also contributed to growth of production. Nonetheless, a more or less normal monsoon too paved way for better harvest this year. 

Though agricultural lands are increasingly getting lost due to developmental works, distress sell and other reasons, increase in agricultural production indicates improving productivity. However, it is imperative that loss of agricultural lands should be addressed properly and efforts should be made to ensure that agricultural lands are being used for any purposes other than cultivation. 

Rekindling hopes for hopeless

Tripura, a non-descript State of North East India surrounded by Bangladesh from three sides, is silently but surely marching ahead. Efficient implementation of Government sponsored welfare schemes and well organized three-tier local governance, known as Panchayati Raj, are catalysts to growth of once militancy-ridden Tripura. 

Malda Roaja Para, one of the villages in Dhalai District, is now experiencing benefits of several Centrally Sponsored Schemes (CSS). The village inhabited by tribal communities, located near the Indo-Bangla border area, witnessed bitter ethnic violence during 90s. However, after the ethnic violence ended and world’s largest employment guarantee initiative, coined as Mahatma Gandhi National Employment Guarantee Act (MGNREGA) provided the poorest of poor tribal people of the area to earn a decent livelihood. To know more about MGNREGA click here.

“After a gap of 13 years, we can feed ourselves at least twice daily. This became possible due to wages we earned from MGNREGA works”, said one Lalit Rhangkhal. Apart from ensuring 100 days employment in a year, MGNREGA pays special attention in creating assets for livelihood. Another important feature of this programme is preserving and maintaining natural resources through excavation of ponds etc. In true sense, MGNREGA is helping poor people to live a decent living and creating sustainable assets.