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| High borrowings may push up interest rates, MPs tell Govt |
| Press Trust of India / New Delhi Jul 15, 2009, 16:39 IST |
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The Centre's dependence on borrowings, which is about 40 per cent of its entire Budget, came up for debate today in the Rajya Sabha where members said high fiscal deficit would push the interest rates.
Inflation, particularly of food items, too remained an area of concern, they said in the resumed discussion on the general budget.
Main opposition BJP said the whopping Rs 4 lakh crore gap in the resources was a matter of concern and the impact could be felt on inflation.
Raghunandan Sharma (BJP) said the government had changed the weightage of food items like milk, edible oils and sugar in the price index to downplay the impact of inflation.
"You are trying to deceive the people of the country," he said.
Shobhana Bhartia (Nominated) lauded Finance Minister Pranab Mukherjee for taking a big gamble by allowing high fiscal deficit and said it is a "bold decision" to revive the economic growth.
She said with the handsome allocations for rural sector, this was a budget for Bharat, adding "it pays to concentrate on inclusive growth" as shown in the recent elections.
However, she expressed apprehension that the high deficit may drive up interest rates affecting the private sector. Increase in minimum alternate tax was a bit of dampner in the budget, she said suggesting setting up of equity fund for small sector units.
Sharma said announcements like help to farmers in the grip of moneylenders were restricted to Maharashtra with an eye on assembly polls due in November this year. The budget has allocations for West Bengal which is also going to polls in two years, he said.
Rajeev Shukla (Cong) said the focus of the budget was 'aam aadmi' and the heavy borrowings at times are required for development.
He asked the Finance Minister to divert money to successful primary education scheme Sarva Shiksha Abhiyan from what he called ineffective schemes like adult education.
Shukla sought a package for electronic media on the lines of print media which, he said, has been given rates for government advertisements.
Tarlochan Singh (Independent) claimed that Punjab has received only Rs 1,000 crore out of the Centre's Rs 71,000 crore debt waiver scheme. He said this amounted to a premium on loan default and punishment to those who repay in time.
He wondered how the incentive could be so low when the state has a share of 80 per cent in the foodgrains under Central Pool.
Keshav Rao (Cong) supported the Budget proposals and said the focus was rightly on rural development.
Avtar Singh Karimpuri (BSP) said that the public-private partnership should be reviewed if the country has to be saved. The focus instead should be for removal of poverty, population and pollution control.
Ram Narayan Sahu (SP) said utilisation of money given under NREGA needs to be monitored.
He said the Budget was silent on the naxal menace and wanted to bridge poverty as it breeds violence.
M S Swaminathan (Nominated) complimented the Finance Minister for steps taken on food security and wanted the government to construct modern food storage structures of one million tonne each at 50 places in the country to have adequate reserves.
A K Sengupta (Independent) wanted effective delivery of social development programmes and help to the small and marginal farmers through self-help groups.
Mohsina Kidwai (Congress) supported the proposals saying the budget has given big emphasis on agriculture and said it will help the aam aadmi (common man). She, however, wanted more focussed attention on issues like climate change describing it as a challenge.
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