People's Democracy

THE WEEK IN PARLIAMENT

Subhas Ray

THIS week, Rajya Sabha members strongly resented the increasing US interference in India’s foreign policy and vehemently protested against the threatening letter from some US senators to the prime minister. This is not the first time US senators have written a threatening letter on Indo-Iran relations; some 15 days back 8 senators had threatened of serious consequences for on the nuclear deal if India did not cancel its gas agreement with Iran. Lashing out at the US, the CPI(M)’s Brinda Karat described these letters as an open challenge to our sovereignty. It was absolutely essential for the house to unanimously condemn this threat, she insisted. She demanded that the US ambassador must be called and told that this country was not going to tolerate it. About the agreement, she said it was extremely unfortunate that despite the prime minister’s assurance to keep the house informed about the developments, negotiations were going on without taking the parliament into confidence. It was clear that the deal agreement would be signed when the parliament was not in session. She asked said that the prime minister come to the house and explain the basis of negotiations.

GROWTH STORY VS REAL STORY

After two days of deliberations, Lok Sabha passed the finance bill on May 3, with Rupchand Pal, Khagen Das, P Karunakaran and Sunil Khan participating in the discussions from the CPI(M) side. According to Pal, this government’s 9 percent plus growth story was losing its lustre and that less than 0.2 percent is reaching the common people. The UN’s Human Development Index placed India at 127th place out of 174 countries; even some poorer counties are above us in aspects like health, infant mortality, safe maternity etc. Yet there is no introspection on the situation. The so-called success story is about the billionaires whose number has grown. But we find here no real wealth, only capital market manipulations. Referring to the series of scams since the reforms process started, Pal demanded that the stock market be brought under the RTI Act in the interest of transparency in capital market.

Pal also said there was confusion in respect of tax exemptions for the special economic zones (SEZs) and some other policies. Referring to various committees, he said half the government’s revenue is lost through exemptions for the rich. Exemptions must be there to look after the social sector, weaker sections, minorities or backward regions suffering the uneven development, and there must be a sense of equity and also transparency in the system. Here the finance bill reflects the old outlook that the NDA government continued. The government talks of moderate tax, stability in the tax regime and better compliance. But the rich continue to evade taxes even after getting relaxations, exemptions, moderate rates and concessions. Taking into account the exemptions given to the corporate sector, the actual share of direct taxes in the GDP is not even 13 percent. For example, we are losing no less than Rs one lakh crore in revenue due to indiscriminate exemptions being given to the SEZs, i.e. to the developers. It is not a case of simple revenue loss but of equity. Referring to certain firms, Pal said the government must axe the undesirable exemptions.

As regards reduction in the customs duty, the government is going beyond the WTO stipulations. The way it is being lowered down is hampering the interest of the Indian industry, particularly the small units. As for excise duty, its collection is not proportionate to the success in the industrial sector. The government must also revisit the wealth tax regime whose strengthening may help it to mobilise resources and give some relief to the common people.

Khagen Das described price rise as the biggest problem facing the common man. But the budget fails to make any attempt to strengthen the PDS which plays an important part in keeping the prices in check. As pulses are the only source of protein for the poor but their prices have gone beyond the common people’s reach, they too must be included in the PDS. The budget has made only a token provision for crop insurance but it must be extended to the entire country and all crops. There must be a fund for stabilisation of prices of agricultural products, reduction of interest rate on agricultural loans to 4 percent simple, distribution of land to every landless household, creation of a fund to assist farmers affected by crop losses, ban on futures trading on agricultural commodities to protect the interests of the producers as well as consumers, and re-introduction of quantitative restrictions on the imports of agricultural produce.

Regarding the North East, Das sharply accused the finance minister of discriminating against the region. Backward areas deserve more plan support to bring them to par with other parts of the country. But the budget allocates less than 10 percent of plan expenditure for the North East in 2007-08; this will only add to the disparity facing and discontent brewing among the people of the region. Special Accelerated Road Development Programme for the region has remained a non-starter. Non-development of infrastructure and a worsening security environment is preventing the to region’s economy from taking off. The finance minister said he was providing Rs 1380 crore for the region in 2007-08 but without clarifying that a substantial portion of this amount consisted of the non-lapsable central pool of resources, which several central ministries could not effectively utilise for their schemes in the region. The finance minister must clarify as to why these ministries could not utilise these funds. Dealing with the acute power shortage in Tripura, Mizoram and Manipur, and the unemployment in the region, Das demanded the inclusion of North Tripura district in the National Rural Employment Guarantee Act.

P Karunakarn also said the government must implement the NCMP without losing time if it wants to escape the wrath of the people. While the NDA regime had exempted some important commodities from the Essential Commodities Act to help the hoarders and black-marketers, the UPA regime needs to prevent such activities. It is true that the government needs resources to implement the NCMP but it is increasingly burdening the common people instead of taxing the rich. Next, he raised the issue of 50 lakh beedi workers, and also demanded that the Sachar committee recommendations must be implemented without delay.

Sunil Khan said most of the big industrial houses and multinationals are allowed huge tax concession, tax holidays etc, and there is no justification of granting tax exemptions on the money earned in stock market. He also demanded lowering of the tax on handmade soap from 16 to 2 percent so that their manufacturers may earn their bread.

Prasanta Chatterjee, CPI(M), spoke on the finance bill in Rajya Sabha. He asked: which sections of the population have benefited from economic ‘reforms’? It is undoubtedly the rich, having myriad tax exemptions. On the other hand, people are starving while a lot of grain is rotting in godowns. Unemployment is growing to dangerous proportions. But there is no serious attempt in the finance bill to rationalise the tax exemptions. The tax arrears at the end of 2005-06 stood at Rs 90,255 crore, but there was little attempt to collect them. Further, there is need to provide more tax relief on personal income tax. Clause 10 of finance bill must be axed since it would increase the tax burden on employees. Customs duty rates must be in tune with national needs and priorities.

Apart from many other points, Chatterjee raised the issue of centre-state relations and the unjust burden of central loans on the states. It is unfair to increase the burden on the states in respect of major national programmes like Sarva Shiksha Abhiyan, he said.

OTHER ISSUES

In a special mention in Rajya Sabha, Tapan Sen, CPI(M), drew attention to the then impending strike by bank employees. Expressing concern, he said one million bank employees including officers had been agitating for a second option on pension, restoration of appointment on compassionate ground and stoppage of outsourcing of core banking functions. The denial of second option for pension to a section of bank employees demonstrates the management’s rigid approach, though it has only a negligible financial implication for public sector banks. Rampant outsourcing of various core functions, in the name of acute staff shortage, smacks of a sinister conspiracy of privatisation of banks. He demanded that the government intervene to avert such a situation and settle the just demands of bank employees amicably.

The CPI(M)’s Brinda Karat expressed serious concern over permission to Dow Chemicals to sell banned pesticides in India and its plan to set up manufacturing units here. She said the company got this permission by bribing government officials. It had to pay a fine of 3,25,000 dollars to in the US for paying bribes to several Indian officials. According to records, a senior official in the Central Insecticides Board (Registration Committee) received 39,000 dollars for registering Dow’s pesticides in India between 1996 and 2001 and other officials received 87,000 dollars for facilitating their distribution and sale. Dow Chemical is the present owner of the Union Carbide Corporation which was responsible for Bhopal gas tragedy. It still sells a pesticide like monocrotophos in India, banned in most of the developed world years ago. The member asked the government to take serious note of these facts and appropriate action swiftly.