People's Democracy

         CITU Terms It A Mixed Bag, Demands

Reconsideration Of Several Issues

The CITU secretariat issued the following statement on July 8:

THE union budget 2004-05 of the UPA government, presented by the finance minister P Chidambaram, is practically a second interim budget for the remaining seven months of the fiscal year, which is a carry forward of the president’s address to the joint session of parliament. It is a mixed bag comprising a modest beginning in the direction of implementing the Common Minimum Programme as also several ominous steps, which are of concern to the trade union movement and the working class.

The proposals for augmenting investment and welfare measures quite substantially for the agricultural and rural economy covering major section of populace are all welcome steps; but it falls short of addressing the real issues of the poorest of the rural populace. For this certain structural changes in the rural economy in the form of land reform and comprehensive legislation for the agricultural workers and rural poor are the essential requirements. The union budget is completely silent on that.

Proposed augmentation of allocations on education, financed by a cess of 2 per cent, health-care and water management will be beneficial, if properly implemented.

The CITU welcomes extension of additional equity support of Rs 14,194 crore and credit support of Rs 2,132 crore to PSUs, as also the constitution of the Board for Reconstruction of PSEs, ostensibly for considering, on a case to case basis, restructuring of PSEs.

However, the CITU expresses strong reservation over several of the budgetary steps, detrimental to the interests of the national economy and the working people, as under:

• Enhancement of the FDI cap to 74 per cent in telecom and to 49 per cent in civil aviation and insurance sectors, which will be detrimental to national interests and seriously hamper the expansion and maintenance of the telecom, aviation and insurance network in backward areas of the country.  The CITU also opposes the proposed divestment of 5 per cent shares of NTPC. Ample scope has been given to the FIIs, thereby giving a fillip to their speculative role.

• De-reservation of 85 items from the list of Small Scale Units, which will contribute toward monopolisation of those sectors by big corporates and MNCs by proxy, wiping out the real small scale entrepreneurs, thereby imparting negative consequences in respect of employment generation and real investment growth and redistribution.

• The sharp reduction in customs duty on imported steel and simultaneous increase in excise duty on the domestic steel products will push the domestic steel industry in severe competitive disadvantage to the detriment of national interest.

 The decision to raise, though marginally, the ceiling of income tax exemption to Rs 1 lakh is welcome. But it is deplorable that despite several appeals, the finance minister has not considered excluding from the tax net the perquisites and welfare benefits of the workers, although he himself argued the case in high court demanding such consideration prior to becoming the minister.

The CITU strongly deplores the announcement to continue the interest rate of 8 per cent on PPF, GPF and Special Deposit Scheme, totally ignoring the demand of the trade unions for an upward revision thereof. This will result in further drastic reduction in the interest rate on the lifetime savings of the workers in provident fund - a situation the trade unions cannot accept lying down.

The CITU also takes exception to the move to bring under tax net the terminal benefits under the contributory pension scheme for the newly appointed central government employees. There is a danger of this concept being extended to those under EPF and Employees Pension Scheme 1995.

The CITU urges the UPA government to seriously reconsider these negative aspects in the budget and review the proposals as demanded by the trade unions.

The CITU also calls upon the working class movement to take these issues to the mass of the workers for unitedly pressing the government to revisit these aspects for appropriate changes.