People's Democracy

TUs Meet FM For Consultation

CITU Inputs For UPA Govt’s First Budget

The union finance minister, P Chidambaram, made a departure from the NDA regime, by convening the pre-budget consultation meetings and invited the representatives of the central trade union organisations for consultation on June 5.

The CITU was represented by its general secretary, Chittabrata Majumdar, and secretary W R Varada Rajan. The other central trade unions which participated in the consultation meeting were AITUC, HMS, UTUC-LS, INTUC, BMS and INFTU.

The finance minister made a careful note of all the points made and assured that they would be given appropriate consideration. He also assured that he would meet the trade unions for a post-budget discussion as well.

The CITU presented a separate memorandum to the finance minister detailing its views on the budget, full text of which is given below:

WE welcome re-initiation of pre budget consultation process by the Ministry of Finance, which was discontinued last year by the previous NDA regime. The present finance minister, in his earlier tenure, had also a post budget discussion with the central trade union organisations (CTUOs). We sincerely hope the same practice would be resumed again.

The Common Minimum Programme (CMP) of the present United Progressive Alliance (UPA) government perceives a change in the earlier direction of jobless corporate-centric growth by setting a basic principle of governance as “to ensure that the economy grows at least 7-8 per cent  per year in a sustained manner over a decade and more and in a manner that generates employment so that each family is assured of a safe and viable livelihood.”

The first budget of the UPA government should, therefore, try to tentatively quantify job growth potential for all investments both in rural and industrial sector.

We desire that the budget proposals should comprise a time-frame for enactment of National Employment Guarantee Act, as promised in the CMP and include, in the interim, the food for work programme on a massive scale.

Successive economic surveys since 1998-99 to 2002-04 show severe demand compression on all fronts involving common man viz. per capita food grain consumption, urea consumption, diesel consumption, power consumption etc. Nothing tangible had been done in successive budgets to increase the purchasing power of vast rural and urban poor and lower middle class. The budgetary exercise continued to tinker with the supply side of the economy resulting in gains for the privileged few, without commensurate increase in earning level of workers or farmers.

Concrete steps need to be initiated for augmenting demand in the economy through generation of employment and improving incomes of workers and farmers.

• Incentives to employers for investment should be linked to tangible employment generation targets.

• Land reforms and bringing rich farmer/farmhouse owners under tax net

• A time frame for enactment of comprehensive central legislation for agricultural workers providing inter alia minimum wages and social security, as envisaged in the CMP.

• Speedy enactment of the Unorganised Sector Workers Bill, taking into account the unanimous inputs by the CTUOs

• Strengthening of Public Distribution System; augmenting supply of kerosene through the PDS

• Areas badly affected by industrial sickness like tea, jute, textiles, engineering etc. should be specifically identified for more subsidised PDS as a relief measure

• Alarming increase in industrial sickness  during last five years has to be treated as a socio-economic problem. The number of companies, in large/medium scale industries, registered with the BIFR has increased from 2000 odd in 1997 to more than 4000 in 2003, involving 23 lakh employees. These are mostly in private sector, negating the widely propagated misconception that sickness is a public sector phenomenon. Substitution of BIFR by NCLT would only hasten closure and block utilisation of huge productive assets like land, machinery and other infrastructure. The government should set up a separate department for industrial reconstruction to monitor sickness at incipient stage and take preventive and anticipatory measures. It should also look into re-utilisation of assets of closed units for industrial purposes, wherever possible. Revival of sick CPSUs should be the model for private sector to follow

• Creation of an appropriate mechanism for protection of small scale industries against unfair competition with large units of MNCs, along with concessional credit facilities. Quantitative restriction on import of goods, particularly those produced by small scale and rural sectors should be re-imposed

• Import duty on Coal should be restored to 1998 level

• Evolving of a national social security policy to provide a comprehensive scheme covering all section of workers and extending relief to those who are involuntarily unemployed for early implementation

• Restoration of 12 per cent interest rate on Employees Provident Fund, Small Saving, GPF, PPF etc.

• Reversal of NDA government decision of replacing the existing benefit defined pension scheme by a new contribution defined pension scheme for new entrants in government service

• Appointment of new review committee, with due representation to the CTUOs, to devise a transparent mechanism of compiling the cost of living indices

• Provision be made for payment of statutory dues to workers of CPSUs in the budget (Rs1900 crore)

• Salaried working class who do not and cannot evade tax payment on the plea of dispute as the tax is being deducted at source is being squeezed further through tax on basic welfare related perquisites like medical benefits, leave travel concession, education, housing loans at concessional interest, transport, canteen facility, availing company’s quarters and related amenities. Taxation on these perquisites should be withdrawn

• Exemption limit of Income Tax should be raised to Rs1 lakh (with standard deduction) or Rs1.5 lakh (without standard deduction)

• Benefit of standard reduction be extended to pensioners, retirees and self employed, who mainly depend on pension or interest income on savings

 RESOURCES MOBILISATION

In a joint memorandum recently presented to the union minister of labour, seven Central Trade Union Organisations (CTUOs) have emphasised that the government can mobilise ‘additional resources to finance the programme of development benefiting the people, by blasting corruption, paving the way for economic growth, ensuring better tax compliance, curbing tax default, realising the outstanding bank loans and tax arrears, augmenting direct tax revenues by broadening the tax base and incidence on the vastly affluent and rich landlord sections, giving relief to salaried employees by   increasing income tax exemption limits, mobilising domestic resources by launching long term development bond.’.

• We invite your serious attention to ever-increasing amount of outstanding dues on income tax, corporate tax, custom duty and excise duty. As per figures furnished in Parliament, the amount of unrecovered taxes on this account has gone up from Rs47,000 crore in 1997-98 to Rs87,000 crore in 2001-2002. These have been attributed to various disputes on assessment raised by defaulting corporates, industrialists and super rich. Raising dispute therefore, has become an easy route for deferment of tax dues for years together.  We suggest that as in the case of common man using electricity, telephone, etc., the tax payers in such cases should pay the stipulated amount assessed by the authority first, before their disputes are considered and settled within a time-frame. Legislation may be brought for this purpose, if necessary

• A target must also be set in the budget for recovery of unpaid loans from defaulters in nationalised banks

• Increase the tax-GDP ratio, which has declined during the reforms era since 1991, with a hike in the direct tax component and not in the burden of indirect taxes on those already over-burdened

• While promoting a higher degree of tax compliance, a rigourous drive towards resource mobilisation through recovery of tax arrears, tapping of black money, on the spot taxing on vulgar public display of squandering of money in the name of social function, etc. should be resorted to with beneficial results in the long run for capital starved country, rather than one time sale of public assets through disinvestment. 

(INN)