SHRI RAVULA CHANDRA SEKAR REDDY (CONTD.): .. so that we can save the industry and the poor people who are working there.
THE VICE-CHAIRMAN: Do you know that you are thinking of some hundred or thousand workers; you are not thinking of crores of people whose health is becoming bad? I will not go into that argument. You finish your speech. ..(Interruptions)..
SHRI RAVULA CHANDRA SEKAR REDDY: Sir, I am interested in labour.
THE VICE-CHAIRMAN (SHRI SANTOSH BAGRODIA): Labour does not mean that you spoil the health of the whole country. But, still you continue.
SHRI RAVULA CHANDRA SEKAR REDDY: Sir, you are thoroughly mistaken. ..(Interruptions)..
SHRI K. KESHAVA RAO: There are 47 lakh workers. ..(Interruptions)..
THE VICE-CHAIRMAN: Mr. Rao, there are a hundred crore people in the country. The world has established that smoking is not good for health. So, beedi is smoking.. ..(Interruptions).. All right, that is your opinion. ..(Interruptions).. This is my opinion. ..(Interruptions)..Please go ahead. You finish your speech. ..(Interruptions).. You want to smoke; you smoke and spoil your health. I do not care. ..(Interruptions)..
SHRI RAVULA CHANDRA SEKAR REDDY: I am worried about alternative employment. If the factory is closed down, what will happen to the workers? ..(Interruptions)..
THE VICE-CHAIRMAN: That is what is right. You plead for alternate employment. ..(Interruptions).. That is what you should plead. ..(Interruptions)..
SHRI RAVULA CHANDRA SEKAR REDDY: Sir, I made a Special Mention requesting the Government of India to provide alternative employment and till then, the factory should be allowed to continue. That was my Special Mention. For this I got a reply from the Minister that it is injurious to health. I am conscious of it. At the same time, how can you force the people to go for unemployment and beg in the streets? On the other hand, you have launched a programme called the National Rural Employment Guarantee Programme. Sir, you are not allowing me to narrate the plight and problems of the people who are covered under this programme.
THE VICE-CHAIRMAN (SHRI SANTOSH BAGRODIA): It is not that I am not allowing you. Instead of four minutes, you have taken 11 minutes. Still you are not satisfied, what can I do?
SHRI RAVULA CHANDRA SEKAR REDDY: Sir, I am aware of the time constraint. There is the problem of farmers' suicides.
THE VICE-CHAIRMAN: Is this your last point?
SHRI RAVULA CHANDRA SEKAR REDDY: Sir, I will take 2-3 minutes and I will finish.
THE VICE-CHAIRMAN: Please finish your speech quickly.
SHRI RAVULA CHANDRA SEKAR REDDY: Sir, suicide by farmers is a big problem. The National Agricultural Insurance Scheme needs a fresh look. It should be simplified and the Government of India or the concerned State Governments should bear the premium cost of small and marginal farmers; in fact, of all the farmers. Irrespective of whether they have availed loan facility or not, all the farmers should be covered under that programme. Otherwise, it will remain only on paper. It is a loan insurance programme. That will be called as the loan insurance programme.
Sir, finally, while complimenting the Minister for his gesture of reducing the taxation on the working class, I would like to..
THE VICE-CHAIRMAN: Mr. Minister, you are not listening when he is complimenting you. ..(Interruptions).. He is complimenting you now.
SHRI RAVULA CHANDRA SEKAR REDDY: Finally, Sir, the Government of India cannot be a mute spectator to the problems of the States. My State is facing a problem with Maharashtra, Karnataka and Orissa. Since my State is a lower riparian State all the neighbouring States are constructing irrigation projects by infringing upon our rights and by not following Tribunal awards. So, the Government of India should intervene ..(Interruptions).. There cannot be a shirking of responsibility. It is the responsibility of the Government of India to solve this problem.
Lastly, Sir, there is the problem of fake passports. It is shocking for the nation. Members of Parliament and Members of Legislative Assembly are involved in this scam. The Government of India should come out with a statement as to what exactly is happening. And, why so much of ..(Interruptions)..
THE VICE-CHAIRMAN (SHRI SANTOSH BAGRODIA): It has nothing to do with Budget. ..(Interruptions)..He does not provide for passports. ..(Interruptions)..
SHRI RAVULA CHANDRA SEKAR REDDY: Sir, it is about the policies of the Government. ..(Interruptions)..
THE VICE-CHAIRMAN: He does not provide for passports. ..(Interruptions).. All right, you finish. ..(Interruptions)...
SHRI RAVULA CHANDRA SEKAR REDDY: Sir, if possible, you punish the people. You tax and punish them.
THE VICE-CHAIRMAN: He has no right to punish them. ..(Interruptions).. All right, go ahead. Please finish your speech. ..(Interruptions).. Mr. Reddy, have you made your last point? ..(Interruptions)..
SHRI RAVULA CHANDRA SEKAR REDDY: If you so say, Sir, I will finish. ..(Interruptions)..
THE VICE-CHAIRMAN: Instead of four minutes, you have taken 14 minutes, are you still not satisfied? Do you want more time? ..(Interruptions)..
SHRI RAVULA CHANDRA SEKAR REDDY: No; Sir. I thank you, Sir.
(Ends) (Followed by PK/3A)
SHRI ROBERT KHARSHIING (MEGHALAYA): Respected Vice-Chairman, Sir, I rise today to participate in this debate on the Finance Bill, 2007, with both, joy and sorrow, in my heart; joy that India, the country that we all love and cherish has been growing at about nine per cent consistently; joy that the Sensex is booming at over 13,000 points, within 23 stock exchanges and over 9,000 listed companies; joy that the Bombay Stock Exchange is the second largest after the New York Stock Exchange; joy that our foreign exchange reserves are almost US $ 200 billion, and that our economy has crossed US $ 1 trillion. But there is a deep sadness in my heart too, Sir. I am sad that the poor are becoming poorer; in my constituency, Meghalaya, tribal villages in remote border areas have been compelled to eating food and vegetables which for centuries we have reserved for cattle, sheep and pigs; I am sad that farmers in India are still committing suicide; sad that India's share in the global trade is just about one per cent; I am sad that the gap between the rich and the poor is growing; I am sad that tribal and the poor youth have to be become Maoists and take to violence because we, the Government, have failed them.
What are the solutions? Sir, as a Member of the Parliamentary Committee on the Welfare of the SC/STs, and also as a Member of the Parliamentary Standing Committee on Commerce, I have been thinking and I am sure all of us have been thinking about what we can do for the poorest of all castes and communities across the country. Here are just three suggestions which I hope that the hon. Prime Minister, the hon. Finance Minister and this august House will consider.
We need to radically reform the delivery systems in this country. Only such schemes for the poor should be considered which directly reach the poor without having any middlemen involved. I will give one example which the Parliamentary Committee on SC/STs has time and again suggested. Let the poorest get one per cent discount for loans from banks, and one per cent more for any saving deposits in banks. Here, there is no middleman involved, so, he or she would directly benefit from this. I am sorry to say that most of the current schemes are not working because of the middlemen and the misappropriation which is involved.
(MR. DEPUTY CHAIRMAN IN THE CHAIR)
Sir, my second suggestion is that this Government should tackle corruption on priority basis. We should set up immediately a Transparency Commission. It is shameful that Bangladesh has a Corruption Commission and we do not have one. The Transparency Commission should consist of men and women of unimpeachable integrity like Shri E. Sreedharan, the CMD of Delhi Metro, Shri J.M. Lyngdoh, the former CEC, Shri Arvind Kejriwal, the RTI proponent and the Magsaysay Award winner, etc. These are only humble suggestions. The Government can consider other names in consultation with the Opposition. This Transparency Commission, without pointing fingers at anyone, should indicate the loopholes and make binding recommendations within a fixed timeframe.
My third and final suggestion, Sir, is, free the rupee to free the poorest. On July 16, 2006, President Putin made the Russian rouble fully convertible, totally free. It immediately went up 15 per cent against the dollar. This year, the Central Bank Governor of China, Zhou Ziaochuan, pledged that 2007 would be another year of extensive financial reforms, that China would pursue reforms in areas including exchange rate regime. The Yuan has gained 4.7 per cent against the dollar since it was revalued by 2.1 per cent in July 2005. Why should the poorest tribal farmers have to slog and work 82 times more than the British farmers just to equal one pound? Why should the poor Indian farmers have to sweat it out 42 times more than the US farmers just to equal the US dollar? Why are we not freeing the rupee? There are three freedoms which are of paramount importance for any nation. The political freedom we got in 1947; the economic freedom, for big business, we got in 1991, but there is no currency freedom. We are still slaves to the dollar, the pound and the euro where the currency is concerned. All corrupt nations control their currencies. (Contd. by 3B)
SHRI ROBERT KHARSHIING (CONTD.): All free, transparent and powerful nations have a fully convertible currency. Sir, in 1947, one dollar was Re 1.13 paise, now it is about Rs. 41. If we want to bring down corruption, free the Rupee. Inflation will come down. The huge oil bills will dramatically come down as the Rupee goes up. The rich and the exporters have had 16 years of a controlled rupee. The Sensex has grown from 2000 points to over 13000 points over the last 16 years. Is it not time to unleash the power of the common man, Sir, by freeing the Rupee? The rich have shares. They have mobiles, cars, fridges, foreign bank accounts. But the poor has no share in his pocket. He or she has only the rupee, the humble rupee, in his pocket. If we have freed the economy for the rich in 1991, it is time that we free the rupee for the poorest man. Have we asked ourselves, Sir, why there are no Indian beggars in the UK or the US? Why are Indians beggars in their own country? Because, however much the beggar works hard, the Rupee is not allowed to go up. It is okay for the Sensex to go up, but not okay for the Rupee to go up. I am sure if Mahatma Gandhi were alive, he would have protested like he did against the Salt Law. Sir, all modern economies like Japan, Britain, Germany, Russia, Singapore, the US, Canada, New Zealand, the EU, etc., have a free currency. Why are we ashamed about the Rupee? Why are we proud to count only in dollars? Are we a dollar economy? Where is our izzat, our pride in our Rupee? When we go abroad, Sir, it is so shameful that most powerful economies have hard currencies for their citizens, but we have a weak, soft currency. I, therefore, call on the Prime Minister, the Finance Minister and the RBI to honour and listen to their own high-powered Expert Committee appointed by the Finance Ministry itself, headed by Mr. Mistry, which wanted to turn Mumbai and India into an International Financial Hub like Singapore or London. They have recommended freeing the rupee and making it fully convertible by December, 2008. Just as the Sensex has grown, Sir, from 2000 points to over 13000 points, my dream is for the rupee to equal one pound. Then everyone gains, not just the rich. From being a one trillion dollar economy, we would become an 82 trillion dollar economy. Sir, Hindustan Times on 23rd April, 2007 and the Times of India a few days later said that 98 per cent of the total enterprises in the country are in the unorganised sector, which means only just two per cent is CII, FICCI, and ASSOCHAM. Ninety two per cent of our total workforce of 457 million in India works in the unorganised sector, but just 1.4 per cent is the outstanding bank credit given to the unorganised sector as on 1999-2000. When are we going to be inclusive and think of this sector, the rickshawpuller, the roadside dhabas, the vendors, the poorest? They would love the Rupee to go up. ...(Time-bell)... Sir, I am just finishing. Why should a sweeper at Heathrow Airport come to India and live like a king just because his 1000 pounds, which should be just Rs. 1000, become Rs. 82000 when converted currently. Sir, in 1986, one pound was just a mere Rs. 16. Today, it is about Rs. 82. When will we have a free currency and not a slave currency? Sir, I lived for six years in the UK and saw first hand how rural Wales, rural Scotland and rural England have the same infrastructure and facilities as London because the pound is free, so the gap between the rich and the poor is not so big. I wish that the same infrastructure and facilities be available for our rural and tribal poor. I call for growth to be inclusive. If the Sensex for companies is free, then after 16 years of good times, it is now time for the Rupee to be unleashed, to be free, so that all benefit from the progress. Thank you, Sir. (Ends) (Followed by 3c/SKC)
SHRI RAHUL BAJAJ (MAHARASHTRA): Thank you, Mr. Deputy Chairman.
Great deal has been said about the Budget and the Finance Bill. I would only point out that apart from being a political statement of the Government, it also sends a signal to consumers, to individuals and to corporates as to how to determine their savings behaviour, expenditure behaviour and investment behaviour. I believe, Sir, and I speak on behalf of the Indian Industry, that our economy has developed a strong momentum because of --and I would agree with Mr. Jaitley there-- our entrepreneurial talent, whether in the agricultural area or services area or in industry. Essentially, we have grown during the last three years. During the last five years, we have grown at a compound rate of 8 per cent per annum, and in the last three years, at over 9 per cent per annum, more due to the entrepreneurship of the Indian people rather than just the Government; I wouldn't say, in spite of the Government, but less due to the Government than to the entrepreneurship of our people.
Sir, it is important to note the share of the corporate tax, which used to be very low earlier. Even six years ago, in 2000-01, it was only 19 per cent. Last year, in 2006-07, it was 31 per cent. Naturally, indirect tax, which is paid primarily by the middle class and the poor, went down from 70 per cent in the 80s to 51 per cent last year.
Sir, mention was made by my friend, Robert Kharshiing, that a lot of money has been put in the Budget to spend, rightly, on housing, agriculture, irrigation, education and health. The point is that we have a leaking pipe, which is due to inefficiency and corruption. Even Rajiv Ganhdi had mentioned many years ago that perhaps only 16 paise out of a rupee reach the intended beneficiary. There are no easy answers, Sir. You cannot remove inefficiency overnight. All kinds of ministries spend money, not just the Finance Ministry, and we cannot get rid of corruption overnight. But Sir --may be my friends in the Left may not like it-- one answer is, public-private partnership, not only in normal infrastructure, to which the Finance Minister made a reference in his speech, but also in social infrastructure, that is, in education, health and even by providing drinking water in the villages.
Sir, we must support the weak, but let us not weaken and discourage the strong because they are propelling the economy forward. The Budget, I believe, had the fiscal flexibility to rationalise our direct taxes because of the buoyancy. It is only this morning that I read that last year's target and budgets were exceeded by direct taxes. But I believe, and I am sorry to say, that that opportunity was lost. In spite of the will of the Government, in spite of the will of the Finance Minister --though I can't put words in his mouth-- because of the compulsions of the political situation, perhaps he could not do many things which he wanted to.
Sir, FDT should have been removed. All exemptions to the corporate sector except R&D should have been removed and the direct tax rate on corporate tax should have been 25 per cent. The Finance Ministry has said that the average rate of tax paid by the corporate sector is 19 per cent. It has been said repeatedly that if you remove all exemptions and charge 25 per cent except R&D, you will get 25 per cent. Sir, my company, Bajaj Auto, paid 32 per cent tax last year. The average may be 19 per cent. The IT companies don't pay tax; 90 per cent of their business is through exports, they don't pay tax at all. So, I pay 32 per cent and then I hear people have paid only 19 per cent! This is not fair, Sir.
Sir, coming to backward area benefits, I had mentioned this earlier to the Finance Minister. He mentioned to me the names of two States, Himachal Pradesh and Uttarakhand. The North-east and J&K have no problems; apart from lack of development, there is militancy there. But, why don't we give benefits to backward districts, to talukas? There are many backward districts in many States. The whole of Himachal and the whole of Uttarakhand too get that benefit, which was driven by the previous Government, on this side, but this Government extended it from 2007 to 2010.
SHRI P. CHIDAMBARAM: But that is not quite accurate. They made it open-ended; we restricted it to 2007. But there is all-round request from the two States and we have extended it to 2010. But then, the point is, there is still a sunset clause imposed by this Government.
SHRI RAHUL BAJAJ: Sir, the basic point remains that Gadchiroli from Maharashtra and many other backward districts from all States including Tamil Nadu, I am sure, deserve as much support. (Contd. by 3d/hk)
SHRI RAHUL BAJAJ (CONTD.): My company, Sir, has gone to Pant Nagar in Uttarakhand. There was no logic; no rated economic reasons. It is a distorted decision only because the excise benefit and in corporate tax benefit given by the Central Government. Mr. Tiwari, the then Chief Minister of Uttarakhand, didn't give me a penny. In fact, for land he charged from me more than what Maharashtra Government charged me. No benefit from the State Government except cooperation. But, yes, the Central Government is giving all these benefits. Sir, I don't find it justified. Sir, another point is on SEZs. I won't talk about land or rehabilitation, farmers, single crop, multiple crop, because all these things have already been said. We have all got land through the Land Acquisition Act. But the time has come when the Land Acquisition Act should be used mainly for public purpose. Government of India, you build infrastructure, you build airports, you build highways, all over the world, you have to acquire land and pay farmers well, but not for private sector any more. Why do you acquire land for private sector? Then, again, where they come up? Regional balance comes in, as Mr. Jaitley said. I think he said that. You are today coming near the big cities where infrastructure exists but it is disintegrating due to influx of people where Municipal Corporations are not working well and we are bringing SEZs near there. I have nothing against any individual. But go to backward areas and then I hope minimum 50 per cent should be used for processing so that we feel there is no land scam. Finally, Sir, what wrong have other people done who for the last forty years produce either on their own in open areas or in EOUs? Now, suddenly, I go to a SEZ or my competitor goes to a SEZ and all his exports are tax free. I am not referring to the developer, but to the entrepreneur, to the unit. I exported Rs.1600 crores worth last year ending March 2007 -- 450,000 vehicles. I paid full tax on my profits. What is the viability problem in SEZs? If you make no profit, you pay no tax. He gets all the benefits of supposedly excellent infrastructure which we did not get. But we pay tax on exports, he does not pay tax. This is not justice, Sir. I don't know why this has been done. Sir, regarding dividend distribution tax, I don't want to say anything else since they are minor points. But I would like to bring to the attention of the Finance Minister an unintended consequence that it reduces the gap between the Indian companies and the foreign companies as the foreign companies do not pay this tax, I think. So, the gap gets reduced by two-and-half per cent. We welcome what you said yesterday about iron ore export and what you said about cement. We welcome the relief you have given. My last point is regarding inflation. We should not sacrifice growth because without growth the poor cannot benefit; nobody can benefit. Growth must be there. We need it -- 9 to 10 per cent. With 9 to 10 per cent growth -- I am not going into the details -- China can have 2 per cent inflation. Yes, why should we not have 4 1/2 per cent inflation which the RBI wants and, I think, which the Finance Minister wants. By only tightening credit and increasing the interest rate, you could hurt growth without helping inflation much. It is a supply side problem. Increase production. I know that it cannot happen overnight. But increase production and increase competition. So, neither the public sector can be inefficient nor the private sector can exploit the customer. We need more production; we need more competition. This is a better solution to control inflation rather than tightening credit. What the Finance Minister has done by reducing the import duty on goods including cement was good. But monetary policy is being used because inflation hurts today. It hurts elections today. Effect on growth will come over twelve months or so. But I think we should look even for tomorrow, and not take short-term and politically-expedient decisions though we all like to be elected again. In conclusion, Sir, I would say that we admire the intelligence and energy of the Finance Minister. But the kind of Budget, I believe, the Finance Minister, could have presented, maybe his hands were tied, okay, fine, but the result is, the Budget is not as good as I would have liked it to be. Whether for the poor, whether for the middle class, whether for the corporate sector, it is less than optimum, maybe due to compulsions beyond the Finance Minister's control.
(ENDS) (Followed by 3e/SK)
SHRI EKANATH K. THAKUR (MAHARASHTRA): Thank you, Sir, for this opportunity. Sir, in my every speech, I try to remind the Government of India, the present UPA Government, to realise the extent of poverty that we have. I have spoken on it often. I would like to repeat only one point that if we take poverty at one-dollar-a-day, there are 350 million people who are poor in India today. And, if these 350 million people, as a figment of imagination, are seen as a separate nation, I would invite the attention of the hon. Finance Minister, if these 350 million people are seen, as a figment of imagination, as a separate nation, after China and the USA, it will be the third largest nation in the world. And, in terms of poverty, everybody being poor in that nation, drawing less than a dollar a day, there are 198 Members of the United Nations today, it will be the poorest nation in the world and it will be ranked, in terms of poverty, 199th. So, we have in India a nation of 35 crore of people which is the third largest nation in terms of population and everybody there being a poor person in that poverty-ridden nation of India, we can call it Bharat or Hindustan, it will be poorer even than the sub Saharan Africa. Therefore, those of us who sit in this highest House of the nation, if we are to see that our democracy is to triumph, we have to first see what is happening to our people, what the Budget is doing to our poor people. Sir, in this Budget, as I would say, the Finance Minister has shown no heart for the poor. The Finance Minister goes to the seminar at Economic Times and declares there to the whole audience that he does not see any dichotomy between growth and equity. I am learning a few lessons from the Finance Minister. We have a Finance Minister. He says that he does not see any dichotomy between growth and equity when in our nation, for the last 50 years and more, poor are becoming poorer. There is a survey which suggests that there are 7 million people today who have cash of more than 5 million rupees, and thier number will go up to 11 million after 2011. So, the rich are becoming richer at a faster rate and the poor are suffering.
Sir, I want to take up one issue of the cooperative sector, and I know when I raise this issue the Finance Minister will leave the House because this is something which I want to point out and this is about the urban cooperative banks and cooperative banking sector. In 1966-67, under Section 80 P, an exemption was given to cooperative banks from direct taxation. This exemption was given at that time on account of persuasion of one great son of Tamil Nadu, the great K. Kamraj. And, another great son of Tamil Nadu, our hon. Finance Minister, P. Chidambaram, is taking it away after 40 years. Sir, these urban cooperative banks are a part of the cooperative sector. For the rest of the cooperative sector, there is the Vaidyanathan Committee, and there is a package. The urban cooperative banks and other cooperative banks that are now being subjected to direct taxation, are not asking for any package for survival. (Contd. by ysr-3f)
SHRI EKANATH K. THAKUR (CONTD.): They are only asking for the existing exemption which was there for the last 40 years. Sir, there are more than 2000 urban cooperative banks and nearly 1200 of them are in various moribund stages; they are on the verge of dying. And in addition to that, the remaining banks will now suffer from heavy taxation. Sir, unlike the sugar cooperative societies or handloom cooperative societies, in the urban cooperative banks, neither the Central Government nor the State Government has invested a single rupee. They have not supported urban cooperative banks with a single rupee. They have grown up on the savings of middle class, lower middle class, and the poorer classes. And they have built their own capital. Sir, right now, there is 30 per cent taxation on these banks, when the corporate sector on average pays 19 per cent. This representation was made to the Prime Minister and the Prime Minister was quite sympathetic. The hon. Prime Minister understands the conditions. But we are told that this exemption will not be restored because many other exemptions are being taken away.
I only want to point out that in 1966, the Banking Regulation Act was amended to include the cooperative banks. Prior to 1966, before including cooperative banks under the Banking Regulation Act, there was a discussion for three years. Sir, at that time, as I mentioned to you, the great son of Tamil Nadu, Great Kamraj, said that if you were including these banks under the Banking Regulation Act, then their surplus would be seen as profit and it would be taxed. It was he who proactively warned the Government of India. And in 1963, he resigned from the post of the Chief Minister and came here and became an important functionary of the Congress. He warned them that the surplus of the cooperative banks would be seen as profit and one day you would think of taxing that. It was due to him that the Income Tax Act was amended and 80P was introduced. And, Sir, another son of Tamil Nadu is brazenly taking away that benefit thereby administering a lethal injection to the entire cooperative sector. Sir, I want to say this because the corporate sector, as I mentioned, is giving 19 per cent. Other public sector banks are giving only 40 per cent of the credit to the priority sector. The urban banks are giving 60 per cent though they are not rich. Urban banks are carrying more loans.
There is agrarian unrest; there is agrarian disaster in India. Three farmers are committing suicide on average in my State every day. And these urban banks are supporting smaller people who are coming from rural areas. Therefore, urban banks deserve this concession. But this concession has not been given. Sir, I want to make only one point. The real problem of India is its lagging growth in the agriculture sector. If we have to consistently grow at 9 per cent, then agriculture has to grow at 4 per cent. And that is not growing. One reason is the public investment in agriculture is very less. There are economists who believe that if the public investment in agriculture is raised to the level of a minimum of 5 per cent, probably the entire agriculture sector may look up. Sir, this has not happened. But, I believe, that further concession in the rate of interest has to be given to our farmers. And I see one area in which this will be considered. Sir, the banking industry today has deposits of about Rs.25,00,000 crore, out of which nearly Rs.4,00,000 crore of deposits have been in the form of CASA deposit, that is current and savings account deposit. On current accounts, banks pay no interest. On savings, though they declare it four per cent, they pay on an average about 2.9 per cent to 3 per cent, because they calculate for a ten-day period. If you take current and savings accounts together, on an average they pay two-and-a-half per cent. When the banking industry is reaching Rs. 4,00,000 crore at two-and-a-half per cent, why cannot they lend to my farmers at 4 per cent?
Sir, one Deputy Governor of the Reserve Bank of India, who has just retired, went to another organisation of the Reserve bank of India. Yesterday or a few days ago, in Mumbai, she said that injustice was being done to savings account depositors by bank by giving them less interest. (Contd. by MKS/3G)
SHRI EKANATH K. THAKUR (CONTD.): Sir, this is Mrs. Owaisi's statement in the newspaper. Sir, if this four lakh crore is available at less than three per cent, why is it that the farmers should not get it at four per cent? Sir, we talk of farmers, we talk of the aam admi, but our heart is not with the aam admi. And this is something which has to be.....(Time Bell)... I am just concluding, Sir. I would like to say only one thing because I am a Member of the new Standing Committee on Food Processing. In agriculture, in addition to the income from the farming, we have to see that other activities like poultry, dairy, horticulture, fissiculture, sericulture and other forms of supplementation for income generation and income supplementation are supported. Sir, the biggest thing that will happen to Indian agriculture is processing. And food processing is very, very important; it can generate millions of jobs, Sir. See the amount that our hon. Finance Minister who has presented his Budget for the aam admi has spared for this entire sector. In India where 60 per cent of the people live and survive in the rural sector, he has made a provision of about Rs.280 crores for the Food Processing Ministry. If you only take into account these three things which I have mentioned, you will come to know that the actions of the UPA which talks of the Minimum Needs Programme are all anti-poor; their heart is not with the poor. Our Finance Minister's heart is necessarily not with the poor because when he went to the Economic Times Seminar, he said.......
MR. DEPUTY CHAIRMAN: Please conclude.
SHRI EKANATH K. THAKUR: Sir, I repeat that. "He does not see that there is dichotomy between growth and equity." Sir, all these actions, I think, call for a review of Government policy. Otherwise, to my mind, the UPA Government will be seen as an NPA Government. Thank you, Sir. (Ends)
STATEMENTS RE. STATUS OF IMPLEMENTATION OF
ELEVENTH AND TWENTIETH REPORTS
STATUS OF IMPLEMENTATION OF EIGHTEENTH REPORT
OF THE STANDING COMMITTEE ON AGRICULTURE
THE MINISTER OF AGRICULTURE AND MINISTER OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION (SHRI SHARAD PAWAR): Sir, I would like to lay statements on the:
(i) Status of implementation of recommendations contained in the Eleventh and Twentieth Reports of the Department-related Parliamentary Standing Committee on Agriculture; and
(ii) Status of implementation of recommendations contained in the Eighteenth Reports of the Department-related Parliamentary Standing Committee on Agriculture.
THE FINANCE BILL, 2007
THE APPROPRIATION (No.2) BILL, 2007 - (CONTD)
SHRI K.P.K. KUMARAN (TAMIL NADU): Mr. Deputy Chairman, Sir, at the very outset, let me congratulate the Finance Minister for presenting a Budget in which the thrust is towards "inclusive growth." My humble wish is that this concept of budgeting should not be forsaken as if it is a one-time affair. This principle should continue on a permanent basis for years to come until all the people of the country move up in the Evolution Ladder.
Next, I would like to thank our Finance Minister for the promptness with which he had struck a key-note of the Budget, re-orienting it as a calculated measure for taming inflation. However, I would request that a study be made on the effect of the all pervasive service tax on inflation and any necessary corrective measures may please be taken.
Our Prime Minister has described the commitment of the UPA Government in strengthening the social infrastructure. This is the basic reason for allocating a hefty portion of the funds for health and education. These two primary imperatives are going to effect direct and sharp changes in the life of the common people.
All measures taken in the education sector will yield good results, but the most praiseworthy scheme is the one lakh Scholarship Scheme for students studying in 9-12 classes. This is aimed at arresting drop-out at this level. However, I would like to submit that this level should not be allowed to get frozen and in the coming years the level should be lowered to the level of 6th standard.
Sir, I want to make a point about the budgetary proposals on health. The Death-cum-Disability Insurance Coverage extended to the rural landless households through the LIC is going to be a Godsend for that hapless section of our society. Landlessness had been considered to be the appropriate criterion for this purpose. But I fear much water has flown under the bridge and especially in States like Tamil Nadu, land-owning has now been made easy for even agricultural labourers, thanks to the revolutionary scheme of allotting two acres of arable agricultural land to them. (Contd. by TMV/3H)
SHRI K. P. K. KUMARAN (CONTD.): So, I request that this norm may be amended to suit the changed situation.
Agriculture has been generously dealt with by the Finance Minister by providing for a selective Crop Insurance Scheme. Though a lot has to be done to the extent that suicide by the farmers would be a forgotten chapter in the history of our nation, a beginning has been made in this Budget. The spirit behind "More Income per Drop of Water Movement" will have to be given a push in this year itself. In Tamil Nadu, a beginning has already been made with the signing of an agreement between the World Bank and the Government of Tamil Nadu to restore 5,763 water bodies with a command area of four lakh hectares at a cost of Rs.2,182 crores.
To cap it all, an amount of Rs.50 crores has been allocated to Tamil Nadu Agricultural University in this Budget. I am sure, the agricultural scientists as well as the farmers of Tamil Nadu will thank the Government for this gesture.
Sir, some provisions have been made to upgrade the coir and textile industries in Tamil Nadu which will boost growth and employment in these sectors.
I would also like to thank the Finance Minister for allocating sufficient funds to the major ports in Tamil Nadu.
Last but not the least important point is the allocation of Rs.524 crores for the Sethu Samudram Project. Since 2007-08 happens to be the penultimate year of this project, this allocation is going to play a vital role in the culmination of the same. The entire State of Tamil Nadu thanks the Finance Minister and, with equal dedication, the Minister of Shipping for this treatment. My humble prayer at this juncture is that this long-awaited project, which has a very long history behind it, should receive similar patronage in the next Budget also so that this project proves to be a milestone in the industrial development of the State and be a thing of strategic importance for the nation.
I have two suggestions to make. One is that the Finance Minister should look at the impact of the Budget on the IT sector. Some new measures have been introduced such as FBT on ESOPS and service tax on lease rentals which may negatively affect the It sector. The IT sector has been the starting point for the impressive growth that we have seen in our economy. If the conditions in our nation make it uncompetitive for the IT industries to operate from our country, they will easily move to other countries. What we have seen is that major players in our country are moving to Malaysia, Hungary, Brazil and so on. So, the effect of the Budget on the IT sector should be closely monitored so that the major role that the IT sector plays in our economy can be maintained.
The second suggestion is the same as our colleague, Mr. Robert Kharshiing, has made. We should look at the effectiveness of the delivery system. Our Government is able to generate huge revenues by way of taxes and able to make very impressive schemes. Naturally, the scheme should get implemented effectively and the funds should be used efficiently so that the common people are benefited. I commend the Finance Minister for providing inclusive growth in this Budget and I thank you for having given me this opportunity. (Ends)
MR. DEPUTY CHAIRMAN: Mr. Tapan Kumar Sen. You have got an amendment. Do you speak now or at the time of moving the amendment?
SHRI TAPAN KUMAR SEN (WEST BENGAL): I will speak now.
MR. DEPUTY CHAIRMAN: Then, at the time of moving the amendment, I will not give you any more chance.
SHRI TAPAN KUMAR SEN: I will not take more than five minutes.
MR. DEPUTY CHAIRMAN: You speak on the amendment.
SHRI TAPAN KUMAR SEN: I want to say two or three things more.
Thank you, Mr. Deputy Chairman, Sir. At the outset, I would not like to be apologetic on the qualification given to the Left by Mr. Jaitley as obstructionists. We know what we are doing in the face of serious distributive inequity and threat to the national self-reliance that is being emitted by the present economic policy regime structure. Secondly, I would like to draw the attention of the hon. Finance Minister to the debate that is going on on inflation, whether it is growth-pushed or it is something like secular. As I understand, the present inflation is primarily driven by the rise in the price of essential commodities, basically agricultural products, foodgrains and eatables. It does not match with the theory of growth-pushed inflation. The productivity has to be increased. Again, there is a limit to that. I think the matter has to be looked at from the micro level, the procurement arrangement and the whole foodgrain administration; otherwise, there will be backlashes which we would not like to do. (Contd. by VK/3J)
SHRI TAPAN KUMAR SEN (CONTD): That is why, even despite being obstructionists, we are continuing support so that they are not dislodged by that kind of development in favour of even worst alternative.
Secondly, it is being learnt that in view of the ultra mega power projects, import of power plant equipments is going to get complete waiver of customs duty or a sharp reduction. If that be so, my request to the Finance Minister is, please consider giving similar equal tax concession to indigenous power plant producers like BHEL, at least, to ensure a level playing field.
Before coming to the issue of amendment, I would like to draw the attention of the hon. Minister to another point. We have asked for declaring North Bengal tax free zone by citing the example of some of the States which have been granted this status. Just now we have heard the Finance Minister saying that that is up to 2010. In reply to our request the Finance Minister said, "That is a very bad economics because that adversely affects the market-based resource allocation and also promotes inefficiency." We are ready to accept preaching provided we are not given only preaches, we are not being only preached. Let us have a concession till 2010. North Bengal must have that facility of tax concession because they deserve that in terms of level of development that they have. We are ready to have the preaching along with the substantive concession in the matter of tax free zone for North Bengal.
Coming to my point of amendment. I moved an amendment suggesting the deletion of Section 11 of the Finance Bill, 2007 designed to tax the salaried employees, workers who are staying in the quarters provided by the employers. As per the said Section, availing such housing arrangement would be construed as additional income for the concerned employees and workers and they will be taxed on such deemed income and that too retrospectively. Sir, I urge upon withdrawal of this Section because it is illogical, it is discriminatory and it tantamounts to double taxation. Not only that. This particular Section is designed to circumvent the order of the Supreme Court which gave some relief to a section of salaried people who are otherwise the most faithful taxpayers in the country, both in the public sector and the private sector. I assure you that these salaried people do not have any share in the huge accumulated unpaid tax arrear amounting to Rs. 1,20,000 crores as on date. Forget whatever you have given, these salaried people are not the beneficiaries. They don't deserve this double taxation. They should be relieved of that. The workers and employees are being given quarters in the interest of production particularly in industries operating in shifts and on round the clock basis. The employees are required to stay near those industries. These workers and employees do not enjoy these quarters as freebies, not free of cost. They are already taxed by the employers for availing company's quarters. They are being compelled to forego their house rent allowance which, on an average, comes to around 15 to 20 per cent of their wages. In addition to that they are compelled to pay standard rent or license fee that also, on an average, rated around 10 per cent of their salary. They are already taxed. Again, construing their stay in the company's quarter as income and adding to their existing income to make them pay income tax, I think, it does not have any rationale and it should be dropped altogether. I again request that this system of double taxation, as it is designed in this Section should be dropped. After receiving so many representations, the Finance Minister made certain concessions. (Contd. by 3K)
SHRI TAPAN KUMAR SEN (contd.): He did give certain concessions, but again those concessions came out to be a mere eye-wash looking at the kind of injustice and indiscrimination meted out to them. So, I would request that this clause be dropped. I would request the hon. Minister to kindly accept my amendment in the larger interest of ensuring fairness, justice and non-discrimination, as is always expected of good governance of the State. (Ends)
SHRI MOINUL HASSAN (WEST BENGAL): Sir I would like to speak on two or three points.
As regards the tax proposals in the Union Budget, 2007-08, it may be said that while the Finance Minister has found himself in a relatively comfortable position because of the higher collection of taxes in the current fiscal Budget, he has not taken any strong measure that would significantly expand the tax revenue of the Central Government in the years to come. In the Budget Estimate of 2007-08, the total Union Government expenditure (excluding the Rs.40,000 crore of non-plan transaction to be undertaken in 2007-08 relating to the transfer of RBI's stake in SBI to the Government) would be 14 per cent of the GDP, which is lower than the 14.27 per cent of GDP figure for the total spending in 2006-07 Budget Estimate.
The decline in the size of the total Union Budget, as a proportion of the GDP in 2007-08, despite the strong optimism of the Finance Minister on the front of tax collections, is solely the outcome of conservative fiscal policies. The present Central Government has been a strong proponent of fiscal conservatism and it has been zealously pursuing the targets for reduction of Revenue Deficit and Fiscal Deficit as dictated by the Fiscal Responsibility and Budget Management (FRBM) Act. Both the Revenue and Fiscal deficit figures projected for 2007-08 Budget Estimate are lower than those for 2006-07 and in conformity with the FRBM targets. A negative value for the Primary Deficit projected for 2007-08 BE shows that the Central Government has failed in bringing down the interest rates adequately, as a result of which the interest burden of the Government has continued to rise.
If we look at the Union Budget 2007-08 in the context of the Government's commitment to the promises made in the National Common Minimum Programme, the results are not very encouraging. It is quite doubtful whether it will be able to fulfil the specific commitments, like, increasing public investment in agriculture, spending 6 per cent of GDP on education, spending 2-3 per cent on health, ensuring social security for workers in the unorganised sector, universalisation of the ICDS and providing a legal guarantee for at least 100 days of employment for at least one able-bodied person in every rural, urban poor and lower-middle class household. In the third year of the UPA Government, the possibility seems to be bleak. The Budget thus can be seen one of missed opportunities and wrong prioritisation.
There is another point that I wish to make and, with that, I would conclude. My friends have also spoken about tax exemption. Sir, as we all know, the North-Eastern States are enjoying tax holiday. Sikkim is also enjoying this facility. In fact, some States in the Himalayan range have also been extended this benefit. The Government of West Bengal has repeatedly requested the Government of India to extend this facility to North Bengal. I would like to know from the hon. Minister as to what the position of the Government of India is on this matter.
Sir, my last point is this. As regards reduction in the customs duty, I think, the Government is going beyond the WTO stipulation. We have already reached a stage and we do not think that we need to bring it down any further. (Continued by 3L)
SHRI MOINUL HASSAN (CONTD.): But the Government is doing it. It is hampering the interests of the small industry and the domestic industry. Sir, two amazing things have appeared. One is that the industry has been performing well, but how is it that the excise duty collection is not matching with the growth in the industrial sector? The hon. Minister owes an explanation, in this regard. Sir, with these words, I conclude.
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SHRI P. CHIDAMBARAM: Mr. Deputy Chairman, Sir, I am grateful to each one of the hon. Members who have participated in this debate. As the hon. Members know and as Dr. Bimal Jalan drew pointed attention, the Budget discussion in this House turned out to be a one-sided, one-Member intervention, with no opportunity to the Government to reply to that debate. I was rather disappointed that that debate ended on such a note. Nevertheless, I tabled the text of my reply before this House, and some parts of that text were also reported in the media.
Shri Arun Jaitley opened the debate this time, has given me an opportunity to revisit the Budget and to answer some of the criticisms that were levelled at that time and some of the criticisms that he levelled today. But, Sir, I cannot depart or deviate too much from the subject of today's discussion. The present discussion is on the Finance Bill. Of course, the debate naturally extends to issues of economic policy, the National Common Minimum Programme, roads, equity, inflation and so on. While I shall address some of those issues, I would like to emphasise that the present debate is on the Finance Bill. The Finance Bill is essentially a Bill that concerns the tax laws of the country, such as, the Income-tax Act, the Excise Act and the Customs Act. Therefore, I would have to devote the major part of my reply to the provisions of the Finance Bill and what has been said about the Finance Bill. But, to begin with Mr. Jaitley, I am glad that he quotes from my book, which means, I am glad that he has read my book, and I am also glad that he must have bought a copy of that book because I did not give him one as a complimentary copy. (Contd. by 3m-kgg)