Title: Discussion on the Demands for Supplementary Grants (General) for the year 2000-2001 and Taxation Laws (Amendment) Bill, 2000. (Concluded).
MR. CHAIRMAN: Okay, now the House shall take up Supplementary Demands for Grants and Taxation Laws Bill together.
(SHRI YASHWANT SINHA): Sir, I beg to move:
“That the Bill further to amend the Finance Act, 2000 and the Income Tax Act, 1961, be taken into consideration. ”
MR. CHAIRMAN : Motions Moved:
“That the respective sums not exceeding the amounts on the Revenue Account and Capital Account shown in the third column of the Order Paper be granted to the President out of the Consolidated Fund of India, of certain further sums necessary to defray the charges that will come in course of payment during the year ending the 31st day of March, 2001, in respect of the heads of Demands entered in the second column thereof against Demands No. 1, 5, 8, 12, 13, 28, 30, 33, 39, 40, 41, 47, 48, 50, 52, 54, 56, 58, 69, 75, 77, 81, 84, 85, 87 and 88. ”
“That the Bill further to amend the Finance Act, 2000 and the Income Tax Act, 1961, be taken into consideration. ”
SHRI PRIYA RANJAN DASMUNSI (RAIGANJ): Sir, I rise to participate in this routine manner of debate on Supplementary Demands for Grants which every Finance Minister, irrespective of party considerations, bring before the House for the required support to meet the exigencies out of the estimated Budget that exceeds the limits and leads to more deficit.
I am sorry to say this. Without any personal acrimony against the Finance Minister, I would say that his Government lacks vision to see the present day reality in this country. His Government does not have any understanding of the field realities, the plight of the workers and the plight of the farmers.
I am sorry to say to the hon. Minister that this Government has totally lost the confidence of the working class, farmers and especially the small scale sector of this country. I will not touch the point as to how this Government has very cruelly – I would like to use the word `cruelly’ – compromised the support given to the anti-poverty programmes in the poverty alleviation schemes by slashing down its targets and its own estimates of 1999-2000 which we have already dealt with in the last Budget discussion. We hoped that this Government would revise the concept and will put more money in this programme. But our hopes were belittled. This Government acted in haste; acted without clarity; acted without vision; and acted without understanding the ground realities and imposed an uncalled for burden on the people of India, especially on those who are below the poverty line, working class and kisans.
In the last few days, cutting across party lines, every Member of this House raised the issue of farmers on three counts. First was, the price is not sufficient enough to justify the cost of production as subsidy has been withdrawn; secondly, the storage and other facilities provided to them are not adequate; and thirdly, the procurement drive in the distress sale under MSP is not taking off in many parts of Bihar and Andhra Pradesh. The Government’s response to that matter was totally discouraging and negative till now. Of course, to maintain the balance of the Government and to get the support of the TDP, the Government did respond to the issues of TDP without understanding the totality of the cry of the farmers of Bihar, Haryana, Punjab and Uttar Pradesh.
I would not like to question the performance of the Government in my words because Finance Minister will say that Congress is habitual of attacking the BJP Government. I will take the liberty of quoting the BJP ideologue, Shri Jay Dubashi as to how the present Government is functioning. He says:
and “I thought the day would never come when I would have to criticise the policies of my own party. But these are strange times we have to do what we have to do.The economy has not been doing too well has been clear for some time. But the Government refuses to concede…. ”
That means Shri Yashwant Sinha refuses to concede. The Finance Minister very courageously told in this House, in a stormy situation, that he stands by the old target. He further says:
“The facts tell a different story. The GDP growth this year will be closer to five than seven per cent, and according to a reputable instiute of academics may even sink to four per cent.
Industry is down to six per cent and inflation up to seven per cent. The stock market has carshed by 2600 points or 40 per cent in eight months. The rupee is still tumbling. And at least one international rating agency has downgraded its rating for India.
The question is not, as the Finance Minister says, of a few decimal points this way or that, so that they can be manipulated into position in due course.
The fact is that the slowdown is not a temporary phase. The economy has been going down the tube for the last four years and is now virtually in a state of collapse.”
This is not my statement. He is your own ideologue. He further says:
“Manufacturing industry, the backbone of our modern sector, has been on the skids since 1995-96, when it achieved a growth of 14 per cent. Last year, it was around six per cent. This is not slow down, it is slow death.”
“..Unless we recognise it for what it is, we shall never be able to deal with it.”Finally, he says –
“The situation is disastrous. We are probably losing one per cent of GDP or Rs.20,000 crore every year because of globalisation. It is a pity that the Government is not even prepared to concede that there is a problem.”Shri Jai Dubashi, who is the economist and ideologue of BJP, in his signed interview, said –
“Is the Finance Minister painting an overly optimistic picture of the economy?”
The answer is –
“Yes. The economy is in a state of collapse.”
The BJP Ideologue concedes it. This is where the country is landed. I am not getting inspiration to score political points just because the BJP leader has said it. I am talking the reality. What had happened? We all know in 1962 China invaded India. I was a student leader at that time. I understand as to what had happened at that time. But the Chinese invasion in recent times in Indian market had been so acute in spite of the presence of this Government. I can tell you if you feel it. The items which the Indian industry is making, namely, pressure cooker, fans, screwdrivers, small machine tools are now being dumped in the Indian market from China for less than half the price. Not one, but four lakh small scale units around Delhi, Haryana, Uttar Pradesh, Maharashtra, Karnataka and Gujarat have closed down and no estimate has yet been made as to what is the plight of these workers. This is happening at the nose of Delhi. Mr. Finance Minister, you can go and find out as to what is happening. Industries producing pressure cookers, fans, small machine tools, sewing machines are on the verge of collapse. Finance Minister’s entire plan of growth had come down. Not only it had come down, it is sinking.
Can I quote from your earlier speech while replying to the Budget? Where do you stand now, Mr. Finance Minister? You said that –
“I have taken care of.”What care you have taken?
“No threat of other kinds of things. I wanted to be honest. Despite the fact that the final Report of the Eleventh Finance Commission is still awaited, I have included this figure of Rs.11,000 crore in my Budget estimate. Where is this Rs.11,000 crore going? All of it is going to the States. Every State is going to benefit from this money, which will go as grants.”
So, when you look at the fiscal deficit, Rs.11,000 crore is exactly 0.5 per cent of the fiscal deficit. This 0.5 per cent of the fiscal deficit has been added to the Government’s next year’s Budget. But to that extent, as far as the national fiscal deficit is concerned, 0.5 per cent would be less. This is the case as far as State fiscal deficit is concerned.
Sir, that part of 0.5 per cent would be less as far as States fiscal deficit is concerned, according to the Finance Minister. But if you add this, what is the figure we arrive at? It is Rs.35,000 crore, which is just add one more item of expenditure to this and that is, interest payment of Rs.10,000 crore and Rs.45,000 crore of expenditure increase in this year’s Budget is accounted for these items alone.
Where do you stand in this matter today? The entire thing got collapsed and collapsed because the Finance Minister did not anticipate at all as to what is coming because of your reckless policy approach, your casual approach of imposing duty on the imported items from time to time. It put you in another disaster.
Your NPA realisation is a disaster. You could not realise the Non-Performing Assets which you promised you would in the last one year with drastic measures, etc. What did you realise?
The industrial growth from April to September, 2000 is only 5.5 per cent as against the estimated growth of over eight per cent.
It is not just a story. It is a disaster. So, the Government has to do some very serious thinking over this. The inflation rate for the week ended on 4th November, 2000 was 7.30 per cent as against 3.20 per cent during the corresponding time in 1999. What happened during this period of one year? In 1999, the Finance Minister claimed that they had no positive mandate and they had to somehow manage it. He also claimed that the gate of economic reforms was not fully opened and in this year’s Budget, he claimed that everything is clear and he is very confident of achieving the target. But the inflation rate has increased to 7.30 per cent as compared to 3.20 per cent during the corresponding period in 1999 and it stands at 7.45 per cent now.
The Foreign Direct Investment upto September, 2000 was only US $2.16 billion. If this is the rate of investment that comes to the coffer, how can he assure growth even in the field of investment? In this context, I would like to give an example of a foreign company and how the Government is dealing with it. Suddenly, on a fine morning, throughout India everybody finds a new hoarding in every important city about a company called LAFARGE. It is a cement company from France. I admire their marketing skills. Within 15 days, we find publicity hoardings in every district town of India. But what did LAFARGE do? They tried to rescue two or three sick units and brought down the price of cement, thereby compelling other units also to bring it down. Did LAFARGE bring any money into India while buying those units and while trying to expand? The Finance Minister has to answer this question. On the other hand, LAFARGE asked for our money from PFI to invest here, which is not the case in China. In China, the foreign investors have been categorically told that they cannot raise money from their Stock Exchanges and they have to bring the money. So, the amount they brought into China is really substantial whereas, in our case the position is totally different.
Sir, I am sorry to say that Mumbai Stock Exchange is one of the greatest casinos in India now. It is controlled by a few FIIs at the cost of small investors. The casino opens in the morning and decides the destiny of millions of small investors within a few hours and that is done only by a handful of people in a closed circuit. But the Government is a mute witness to it. I can give a number of such examples, but there is not enough time. During the last one year alone, the small investors have lost over Rs.1,50,000 crore on account of very high speculative activities in our Stock Market and 50 per cent of this loss has gone to a handful of FIIs in the form of profit. Most of these FIIs have taken the Mauritius route and as such they get significant tax benefits also.
The policies of the Government are tailor-made to benefit only foreigners and big business houses. The Stock Exchanges in India have become major casinos for foreign players. There was sudden buoyancy in the Stock Market without any fundamentals, but it was purely on account of calculated statements made out of context by the Ministers so as to benefit a particular class and it had raised many questions with regard to the Government’s involvement in the artificial bullish and bearish trends in the Stock Market.
Sir, just before the last year’s General Elections, there was no reason to suggest a sudden rise of about 1800 points in the Sensitive Index. There was an overall political uncertainty, the Kargil War was going on and the economy had not registered any significant growth. We all appreciate that situation. It was a war of the people against the invaders and we are grateful to our jawans who defended our territory. But the Prime Minister’s out of context statement that the provident fund will be allowed to be invested in the Stock Market made the market bullish. Now there is no move to invest the provident fund in the Stock Market. So, the suddent bullish craze in the Stock Market just before the last year’s General Elections and its subsequent fall needs a thorough probe. In spite of artificial bullish trends in the Stock Market, the investors have lost all faith in the Stock Market now. This is what had happened.
They have lost the faith. Therefore, things are not coming up. Why will the industrial growth not go down? If India””s own indigenous entrepreneurs feel, they can do it.
I give an example of a Kolkata Company. Shri Sudeep Bandyopadhyay is here, he knows the company. It is Khaitan Fan Company. We used to see Khaitan Fan. He closed everything. He took a flat in China. From there he is assembling everything and putting the stamp ””Khaitan Fan made in China””. He is manufacturing at half than the price that he used to manufacture here and is dumping in the Indian market. It is like any other unit. One unit after another unit are going like this.
What does the hon. Minister do? He does not create employment because he lacks vision. He cannot protect the employment because he has no policy. He cannot encourage the investor because he is in the trap of FIIs. He cannot generate the growth because he has already crashed the bottom level economy. That is why his ideologue said very correctly, ””It is not leg is down, it is a collapse””. And we are at a collapse stage. I am afraid, we should not face the fate of South Korea or Mexico.
I have a strong feeling and faith in our workers. In every State, you go, working class is on the streets; farmers are in tears; and only Shri Yashwant Sinha has the usual established smile and this smile, I always wish, should be a live smile and not a still photograph. This is why we are witnessing this situation in the country.
Sir, the Government is not determined to tap the defaulters. There are hundred noted defaulters of the Central Excise and Income Tax. If he had caught 25 per cent of them, his supplementary demands would have been reduced to a substantial extent. Did he touch them? The Government would not be required to present the supplementary demands to this extent if hundred defaulters of Central Excise and Income Tax would have been caught.
Sir, I give you another classic example and the whole House will understand what I want to say. One of our important resource generation of the excise duty is from an item which you all oppose, at least, I am opposed to smoking. I feel everybody should stop smoking. The whole world is building a campaign against smoking. Yet you will ask what the growers will grow in Andhra Pradesh. You will ask where the workers of cigarette industry would go. Why? So, long as you cannot phase out by a systematic campaign of environment, impose more duty.
Now, I tell you the game here. ””The present excise structure related to the length of the cigarette.”” The hon. Minister keeps smiling. He understands what I mean. ””The Managing Director of a company, smoking 84 mm cigarette costing Rs. 2.40, let us say a length related specific duty of 0.80 paise. Then he has paid 33 per cent duty to the Exchequer. While, his driver smoking 84 mm cigarette costing Rs.1.20 would also pay a length related specific duty of 0.80 paise or 66 per cent duty. But if there would be a combination of specific, as well as higher rate of advalorum duty on costlier brand and a lower advalorum duty on a cheaper brand, then the driver could not end up paying double the excise duty as compared to his Managing Director.””
Sir, this is the advantage which is being exploited by a big house in this country, I do not like to take his name, who has been caught in the excise trap many a time and yet the Government is allowing them to play fraud on the nation and he is not taking any objective merits on this case. Why should they be let out like this?
Sir, excise duty structure on cigarettes is highly anomalous. ””The excise duty rates of the length of cigarette is not only loaded in favour of the smokers of costly brand as compared to the smokers of the cheaper brand.””
Between the two Union Budgets, most of the cigarette companies introduced two or three price increases. The increased prices do not bring increased revenue to the Government. Mr. Finance Minister, can you deny that? I know what I am talking. In my private capacity as sports organiser, I will lose much because they will withdraw from my sponsorship. But as a citizen of the country and a patriotic citizen of the country, I must expose them. They are looting the nation and cheating the exchequer. They are not paying the duty as you desire. Therefore, you have got to examine this matter and make a comprehensive probe as to why your Ministry will allow this kind of structure. I do not like to take much of the time on the excise matters. I only pointed out cigarette sector.
Now, let me come to the withdrawal of subsidy. At Red Fort, the Prime Minister on 15th August rally made it clear, ‘come what may, the issue of poverty and the issue of the poor people should be given top priority and the topmost consideration.’ In the Nagpur Session of BJP, several delegates said, ‘come what may, we shall not compromise the interest of the poor people. I have gone through their proceedings. All these words are very good. I may be of an Opposition Member to BJP but when I feel similar words are coming, I feel the poor people are protected. From the day of introduction of your Budget till to this date, did you at any point of time try to consider the re-introduction of subsidy, stage by stage, at least on the food items? No. Only on the price hike of petroleum products when Kumari Mamata Banerjee made a big hue and cry and almost tried to get out of you, then to protect your Government, you had to shed your tears two or three times with the handkerchief of Shri Ram Naik. You tried to give something here and there.
MR. CHAIRMAN: Please conclude.