SHRI RAHUL BAJAJ (MAHARASHTRA): Thank you, Mr. Vice-Chairman, Sir, for giving me this opportunity. I stand here to support both the Appropriation Bills, No. 4 and No. 5. Sir, I would like to put on record that I support these Bills as an independent Member of this august House who was brought in this House by ...

THE VICE-CHAIRMAN PROF. P.J. KURIEN): Independent 'honourable' Member.

SHRI RAHUL BAJAJ: Sir, I can't say that about myself. But, elected by all the four major parties, BJP, NCP, Shiv Sena and Congress in Maharashtra, I may clarify for the few who don't know ...

SHRI P. CHIDAMBARAM: Now, he has said who sent him in the House.

SHRI RAHUL BAJAJ: The Finance Minister has a point of view, Sir. But three parties voted for me, and the 4th party, the Congress, also helped me come here because they put up a sacrificial candidate against me. And, therefore, as I say, I have come here with the unanimous support of all the four major parties.

Sir, I have to make three points while supporting both the Bills. I don't need to get elected by the Aam Aadmi. So, I don't talk of Aam Aadmi just as vote bank politics. But, I am talking of Aam Aadmi. This country can't move forward. We can't have a growth rate, whether 4 per cent in agriculture or total growth rate of 10 per cent or we own 15 per cent, which my friend, Sharad Joshi, is talking about, unless we have growth. So, we need growth, Sir. What does an Aam Aadmi need ultimately? Employment and rising income -- whether in agriculture or anywhere else -- and a control on inflation, not wholesale only, as my friend Arjun Kumar Sengupta said, but the prices that he has to pay can't be 7 per cent. That also has to come down to 3 per cent or 4 per cent. How do we do this? Or, what are the problems? There are many, but in the limited time that I will have, I would like to say that expenditures have to be controlled. Very rightly it has been said that governance is a major issue. Delivery and implementation are major problems. We all know it; the Finance Minister knows it; the Prime Minister knows it. But, we are not finding a solution. There is inefficiency; there is corruption. Please go in for public private partnership. Where private sector comes in, keep it accountable. Whether NGOs or corporate sector, keep them accountable because this is Government's money. But, take their efficiency into account. Do not any longer consider the private sector as somebody outside. We are domestic national private sector. Take our help wherever appropriate. So, public private partnership is very important.

Secondly, it has been mentioned by some hon. Members, subsidies have to be there. You can't remove them completely. But, why to the rich? Why to the people who are above the poverty line? Why non-merit subsidies? Where is the politics in that? Why to give subsidy on petrol? I say that as a vehicle manufacturer. Petrol is not used by the poor people. Bonds are really hurting the oil companies. I believe bonds are not shown as deficit financing. I am subject to correction by the Finance Minister. If that is so, the deficit financing, that he assured us will remain under Budgetary figure for the current fiscal year, in spite of all other expenditure, is perhaps not the full deficit of this country, Sir.

My last point is the point, which was referred to by Mr. Arjun Kumar Sengupta, is regarding exchange rate of rupees. Ultimately, 20 years down the line, if India has to be strong, I would like the rupee as one dollar one rupee, not forty. You cannot be a strong country with a weak currency. But, gradually, in the right way, for fundamental reasons of the economy, not by FII money coming in. Let the FDI come in. What is this hot money coming in, whether for this sector or that sector. Yes, you did something for Participatory Notes. There was no openness there. (Time-bell) There was no transparency. Transparency was brought in. For years we have been saying about the Mauritius Agreement, even when Mr. Yashwant Sinha was there, in the NDA Government. Why don't we revisit it? Is it a political Indian Origin People friendly country? A lot of ghotalas are going on under that. A lot of wrong kind of money is coming in. Why can't we put some control on FII money? Because, what is happening with the exchange rate of rupee? Exports are suffering. Especially, the smaller companies, textile industry, auto components industry and many other industries are suffering. I export 20 per cent of my production. My margins are getting very much hit. Why are you holding the exports? (Contd. by 2O-YSR)


SHRI RAHUL BAJAJ (CONTD.): And more important, that has not been talked about, which is hurting Indian industries, small, medium and large, is imports from China. Shri Arjun Kumar Sengupta said that it was coming 'but.' What 'but?' That is not a market economy, I am sorry to say. The cost structure is okay. They are not fully WTO-compliant. Put some anti-dumping duty on that. Don't let Chinese products coming till there is level-playing field for India. Don't even think of an FTA with China. That would be anti-nation, anti-India.

Through you, Sir, I would request the Finance Minister, who has done a great job during the last three years, to continue to help India, Indian people, Indian economy, and Indian industries. Indian industries, I repeat, are not foreign industries. Whether it is Bajaj or any other company, they are not foreign companies. We are as patriotic as anyone on the Left or the Right. Please support the farmer, the industrialist and the Indian people. (Interruptions)


SHRI RAHUL BAJAJ: Thank you, Sir. (Ends)

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׿š ֵָ (֟) : ֤ ֜ Ӿ ֮ Ù , Ù ׸ ..(־֮֬)..

ֳ֯֬ (...׸֮) : ߕ ִ֯ ו

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SHRI KUMAR DEEPAK DAS (ASSAM): *Thank you, Vice-Chairman, Sir, I rise to speak on the two Bills discussed in the House. Regarding the subjects discussed here I would like to highlight that the problems of Assam and the North-Eastern states are not taken care of (interruptions)...

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* English version of Assamese Speech
* I Doubt if the problems of the north-eastern states are really understood. First of all, I would like to submit, the people of the State I come from, Assam, have been losing property worth crores of rupees every year due to flood. Thousands of people are suffering. Schemes which are undertaken to benefit the farmers and their economic growth are not implemented properly in Assam. We are talking about industrial development, agricultural development and economic development. It is said that the GDP growth is now at 9.1%. But in the picture of national growth Assam does not feature.

It does not show the real picture of the entire nation. The real picture is submerged in Assam, in the north eastern States, where thousands of farmers are dying. They are committing suicide. That is the real picture of India today. The picture of a developed nation is hidden under this condition. The farmers all over the country are suffering today; but I think it is important to pay special attention to Assam. The Swaminathan Committee had visited Assam. But I am afraid the Government of India did not pay adequate attention to its report and did not consider its suggestions. The suffering of the people of Assam with regard to price rise is much more than in other parts of the country. I would like to read out a statement made by the then Finance Minister, in 1978, in the Assam Assembly.




* English version of Assamese Speech
(MR. DEPUTY CHAIRMAN in the Chair.)

Sir, I want to quote: "I rise to inform the hon. Members about a matter of public importance. As the hon. Members are aware, the Seventh Finance Commission have submitted their recommendations and

these have been accepted by the Government of India with some modifications. Although as a result of the recommendations of the Finance Commission the total transfer of resources to the States would be more than doubled, the share of Assam in the transfer of resources in absolute terms has been far below our expectation with the result that instead of a revenue surplus which we were hoping for will be left with a substantial gap on the Revenue Account.

(Contd. by RSS/2Q)



SHRI KUMAR DEEPAK DAS (CONTD.): During the Sixth Commission, the resource transfer actually received by us will amount to Rs. 489.34 crores whereas the total transfer likely to be received by Assam during the 5 years from 1979-80 to 1983-84, as a result of the Seventh Finance Commission's recommendations, will be only Rs. 518.65 crores. We are deeply disturbed to find that Assam's share of the total transfer of resources to all the States taken together has been reduced from 4.57 per cent during the period covered by the Sixth Finance Commission Award, to a mere 2.49 per cent for the next 5 years, covered by the Seventh Finance Commission. As a result, the doubling of the transfer of resources from the Centre to the States has hardly benefited our State."

This was the statement made by the Finance Minister in the year 1978.


* Same situation is prevailing in the state today. People are facing the same problems. That is why I say, it is necessary to pay special attention to Assam. The resources in Assam have to be streamlined. Assam has got special subsidies for economic and industrial growth. But have you noticed how much industrial growth has taken place? The Union Government should take note of this. A welknown politician from Assam had served the country as President of India. I am talking about Late Fakhruddin Ali Ahmed. When he was the President then he laid a foundation stone for a Jute Industry in his constituency Barpeta. That is my constituency also. But I am sorry to say, although the nation occasionally pays homage to him nothing is being done to fulfil his dream by starting the project. The foundation stone is now covered under a heap. Sir, we want to draw the attention of the Central Government to solve the problems faced by the people of Assam. Whatever developmental project has been taken up in Assam is progressing very very slowly. I want to mention the Begeebil Bridge project in this regard. The project which was to complete in 7 years, is taking 15 years. The Central Government had announced the project in 1997 to construct a bridge on the Brahmaputra. But it is going on a snails pace and is anticipated to be completed in 2012. Nothing can be more unfortunate. Sir, the people of Assam are suffering and facing problems in railways also. The problems of Assam should be considered national problem. The problem of floods in Assam should be considered a national problem.



* English version of Assamese Speech
Vice Chairman, Sir, I want to say a few words about the problems face by the jute farmers. The price of jute has gone down. The farmers are not getting adequate price for their produce. They are suffering due to the loss.

I submit that the Central Government take note of the problems of the jute farmers of Assam and see that they get proper value for their products. If the farmers of Assam progress, the country progresses. I request the Hon'ble Minister to take not of this. With this I conclude my speech supporting the Bills. Thank you.


(followed by 2r)



* English version of Assamese Speech

MR. DEPUTY CHAIRMAN: Shri Tapan Kumar Sen. Please take two minutes.

SHRI TAPAN KUMAR SEN (WEST BENGAL): Sir, I will complete within two minutes. I have got just three questions. Thank you very much for giving me this opportunity. We had already discussed the economic disparities in the House the day-before-yesterday. It was admitted that there were disparities and they had to be addressed.

Now, the first point is that the rate of growth of disparity is higher than the rate of the economic growth itself thereby reflecting a distributive distortion. I don't think that governance failure is the only reason. There is something wrong in the system and policy model. That is also affecting the Government changing its direction. So, it should be addressed.

Secondly, despite the buoyancy in the tax revenue, the accumulation of tax arrears is increasing, meaning thereby that the full potential of the economic growth could not be harnessed in revenue generation. I think, this area should be addressed very aggressively.

The third and the last point is that the flow of money in the form of FDI and FII is welcome, but not in an unregulated manner. Already certain alarm bell was rung by the Reserve Bank that some regulation was required to be there and it came out very specifically on banning the Participatory Note transactions. I think, the hon. Minister will enlighten the House as to what aggressive action is going to be taken in these areas. Thank you. (Ends)

THE MINISTER OF FINANCE (SHRI P. CHIDAMBARAM): Mr. Deputy Chairman, Sir, I am grateful to the 19 hon. Members, beginning with Shri Ramdas Agarwal and closing with Comrade Tapan Kumar Sen, who participated in this brief debate on the Supplementary Demands for Grants. Sir, it is only right that the opportunity should have been availed of by the hon. Members to discuss the general economic situation, as well as, the economic policies followed by the Government. There have been some words of praise; there have been many points of criticism. I take both of them in the same spirit. While we welcome criticism, I wish to emphasise that an open economy and an open polity is the best road for economic prosperity. To envisage that we must have an open economy, it does not mean that the economic activity will not be regulated. There will be regulation; but an open economy is very different from a closed economy or a controlled economy. Only the day-before- yesterday, the Prime Minister quoted the speech made by President Hu Jintao of China. The President is reported to have said, "Whenever China opened out to the world and opened its economy, China moved forward. Whenever we closed our economy and closed ourselves from the rest of the world, China suffered". The Prime Minister's speech is reported extensively today in one of the newspapers, The Indian Express or so. I request the hon. Members, please read that.

Sir, I only take the point that regulation and independent regulators are necessary for certain sectors of the economy. I believe that increasing openness of India's economy, pursuant to the reforms initiated in 1991, has been the single most important reason that we have moved from an average growth rate of less than five per cent to a situation where we can claim that we have moved to a higher growth rate of about nine per cent. In fact, there is discontent with nine percent today. Please remember that for many years we were content with three-and-a-half per cent and five per cent. I welcome this discontent. We must always be dissatisfied with the growth rate that we have achieved and aim for more. I only wish that Shri Sharad Anantrao Joish's prediction, not for the reasons that he has said, that we should move to a double digit growth, comes true. In fact, that is the goal of the Eleventh Plan. (Contd. by VK/2S)


SHRI P. CHIDAMBARAM (CONTD): We will begin with a growth rate of about 9 per cent and by the end of the Plan, we hope to move to a growth rate of 10 per cent. While criticism of policies and the way it is implemented is welcome, I am, sometimes, disappointed when the people criticise growth itself or people criticise parameters that measure growth. If we fail in delivering drinking water, if we fail in delivering roads to rural India, if we fail in delivering medicines to rural people, the fault is not the fault of growth. What has growth got to do with failure of governance? It is growth which has given us the revenues which we can now apply to different sectors of the economy. Let me just compare two numbers. Just look at these two numbers. The kind of money that is now being applied to different sectors; the kind of money that is being made available to the States. These are just facts. This is not meant to make any political point. In 2003-04, State's share of taxes was Rs. 65,784 crores. This year, it will be Rs. 1,42,450 crores. In 2003-04, grants and loans to State Governments was Rs. 71,583 crores. This year, it will be Rs. 1,06,987 crores. How did this happen? This happened because India's economy is growing at a higher rate, generating larger incomes for more people resulting in more tax and non-tax revenues to the Central Government, which we can share with the States. My only appeal to all sections of the people is, say what you want about the manner in which we apply resources, say what you like about the manner in which we govern the country, but do not run down growth. Shri Rahul Bajaj made the point quite effectively. Growth is imperative. Inclusive growth is the goal and we must work hard to make this growth inclusive growth. Faster and inclusive growth is the title to the Eleventh Plan Document and I must respectfully urge all sections of the House to please support the policies that promote faster growth, but hold us accountable if we cannot deliver inclusive growth. Naturally, concern was expressed about agriculture. I would, therefore, take just a few minutes to explain what we are doing in agriculture. In the current year, agriculture growth rate is, at least, 70 basis points higher than the last year's average. I am, therefore, confident that the year will end with a higher growth rate of agriculture, perhaps 3.6 per cent, closer to 4 per cent. But I cannot say whether we will touch 4 per cent. We might be close to 3.6 per cent. Our aim is to raise agriculture growth to 4 per cent. Without agriculture growing at 4 per cent, it is not possible to address the fundamental issues of rural poverty and rural income. The other two sectors are growing at close to 9 per cent. But if agriculture continues to grow at rates of 2 and 3 per cent, the disparity will only become wider. In fact, even if agriculture grows at 4 per cent, there will be disparity. But we must ensure that agriculture grows, at least, by 4 per cent a year.

A number of initiatives have been taken by this Government. Recently, we announced the Rashtriya Krishi Vikas Yojana. An additional Rs. 25,000 crores, over and above the budget presented in February 2007, have been provided, over a period of time and the Food Security Mission has been launched. We have drawn heavily from all the reports that have been made available on the agriculture sector. Sir, specific initiatives include, in technology, research priorities will shift towards evolving a cropping system to suit agro climatic conditions. The ICAR would be restructured for evolving appropriate cropping systems.

(Contd. by 2T)


SHRI P. CHIDAMBARAM (contd.): In irrigation, as the scope for new, large surface projects is limited, the focus would be to complete the ongoing projects by increasing allocation under AIBP. More emphasis will be placed on participatory irrigation management. In ground water exploitation, priorities would be areas of abundant availability such as Assam, Bihar, Chhattisgarh, Orissa, Jharkhand, parts of Uttar Pradesh and West Bengal. The National Rainfed Area Authority will focus on the problems and potentials of rainfed areas. Input and support services would be strengthened. Efforts will be made to have more inclusiveness in the credit access even while we acknowledge that the total volume of credit has expanded. The new food security mission will attempt to reduce the yield gaps within States and between States, and aim at increasing the foodgrain production by, at least, 20 million tonnes -- 10 million tonnes of paddy, 8 million tonnes of wheat and 2 million tonnes of pulses. Appropriate emphasis will be placed on diversification of agriculture. And equity issues for small farmers' needs would be given special consideration. As far as irrigation is concerned, the total outlays in the Eleventh Plan, at constant prices, is tentatively put at Rs.54,701 crores, as against the Tenth Plan outlay, at 2001-02 prices, of Rs.20,513 crores. In addition, Rs.25,000 crores as Central Assistance to States, through the Rashtriya Krishi Vikas Yojana, will be provided. Further, for irrigation, the total outlay proposal is Rs.1,82,050 crores under the State Plan; Rs.45,415 crores for AIBP, and Rs.4470 crores under Central Plan. Thus the total for irrigation will be Rs.2,31,935 crores. As I said in the other House, the real issue is: Are these monies being well spent and will these monies be well spent? Today, I am sorry to say that most programmes under irrigation are contractor-based, not beneficiary-based. The happiest lot for all these allocations must be the contractors. Therefore, unless we improve the efficiency of implementing these projects, without leakage, without wastage, without corruption, whatever money is provided will not achieve the goals. Therefore, I appealed in the other House, and I appeal to this House; I know there is leakage in many programmes. But, at least, as far as irrigation is concerned, if we can spend this money efficiently, -- it is a huge amount of money; something like Rs.2,31,935 crores in a period of five years -- without leakage and without corruption, the entire landscape of agriculture in this country will be dramatically changed over the next five years.

Sir, as for the expenditure on Agriculture Research and Education, in 2003-04, the total amount was Rs.1,435 crores. We have stepped it up year after year and, for the current year, it is Rs.2,458 crores. This is still a small amount. I will try to provide more. But the fact is that we have raised it from Rs.1,435 crores to Rs.2,458 crores. We have added a huge potential to irrigated land. The total land, that has been added, is quite large. At the end of the Eighth Plan, the total land for assured irrigation is 86 million hectares; under the Ninth Plan, it is 94 million hectares; under the Tenth Plan, it is 103 million hectares. I have just given you the figures for the Eleventh Plan, and I am confident that if we reach the physical targets of the Eleventh Plan, not merely the financial outlays of the Eleventh Plan, if we achieve the physical target of the Eleventh Plan by spending this money, the landscape of agriculture will be dramatically changed over the next five years.

(Continued by 2U)


SHRI P. CHIDAMBARAM (CONTD.): Sir, besides irrigation, the Bharat Nirman has a number of components, and each component of the Bharat Nirman is addressing a concern of rural India, drinking water, rural roads, rural housing, rural electrification and rural telephone connectivity. I don't wish to take the time of the House in listing the achievements of the last two years as well as the achievements of the current year, but, these are target-driven programmes where we have measurable targets and these targets are being measured and monitored, and I hope that as and when we achieve these targets, the people in rural India will find that the quality of their life has improved, at least, a little; that life is a little better to live with roads, with drinking water, with electricity and with telephones.

Sir, there was a lot of discussion about procurement prices. Needless to say, our Government has increased procurement prices. I have given these figures in the past. For a period of five years, the procurement price of wheat was increased by ten rupees a year, on an average, to about 50 rupees. Today, the procurement price of wheat is 1,000 rupees for the next Rabi season. These are the numbers. In 1999-2000, the MSP for wheat was 580 rupees a quintal; by 2003-04, it had come to 630 rupees a quintal, 50 rupees in five years. For Rabi 2008, it is 1000 rupees a quintal. Likewise, in 1999-2000, for paddy A-grade, it was 520 rupees a quintal; by 2003-04, it had come to 580 rupees a quintal, a rise of 60 rupees. We are now offering for the current year 775 rupees, which is a rise of 195 rupees in four years.

SHRI RAVULA CHANDRA SEKAR REDDY: Why is there disparity with wheat when the growth is the same? ...(Interruptions)...

SHRI P. CHIDAMBARAM: Just one second. I will answer. I have noted your point. The MSP is fixed on the recommendation of the Committee on Agricultural Costs and Prices, CACP. In the case of wheat, after calculating the costs, -- and this is considered an expert body -- they had recommended 1000 rupees and we have accepted 1000 rupees. In the case of paddy, we have added a hundred rupees to the recommendation of the CACP as bonus. Therefore, we have not given less than what the Committee recommended. We have actually given more than what the Committee recommended. The demand is, you should give more, even more. That is the demand. Therefore, we go by an expert committee. We have accepted their recommendation. In the case of wheat, we have given exactly as per the recommendation. In the case of paddy, we have given a hundred rupees more than the recommendation. Any demand for even more would, of course, have to be considered by the appropriate Ministry. ...(Interruptions)...

SHRI D. RAJA: The Expert Committee's figures can be questioned because the Field Investigators have not visited the villages; they have not gone to farmers. ...(Interruptions)...

MR. DEPUTY CHAIRMAN: This is the same thing. You can ask it after this.

SHRI SU. THIRUNAVUKKARASAR: Sir, since the hon. Minister is replying to this point...(Interruptions)...

MR. DEPUTY CHAIRMAN: Don't ask in the middle. ...(Interruptions)... It is not a good practice to intervene when the Minister is replying.

SHRI SU. THIRUNAVUKKARASAR: Sir, since he is answering this point...(Interruptions)... I have just one sentence. Sir, in 1995, the wheat price and paddy price was the same. ...(Interruptions)... Over the years, the difference started with Rs.50, Rs.100. ...(Interruptions)...

SHRI P. CHIDAMBARAM: I understand that. ...(Interruptions)...

SHRI SU. THIRUNAVUKKARASAR: Now, the difference is Rs.300. Why don't you increase it to Rs.1000? ...(Interruptions)...

SHRI P. CHIDAMBARAM: Mr. Thirunavukkarasar, in 1995 also, the MSP was fixed based on the recommendation of the CACP. In 2007 also, the MSPs are fixed based on the recommendations of the CACP.

SHRI SU. THIRUNAVUKKARASAR: Then there is something wrong with the recommendation of the Committee.

MR. DEPUTY CHAIRMAN: That is a different question. ...(Interruptions)...

SHRI P. CHIDAMBARAM: It is a different matter, if you question the conclusions of the CACP. I mean, you were in the Government; your party was in the Government, at no time, do I recall the NDA questioning the recommendation of the CACP. Shri Chaturanan Misra was the Minister for Agriculture between 1996-98, I cannot recall his questioning the recommendation of the CACP. If something is fundamentally wrong today with the CACP, you can raise this issue, I am sure, the Minister will answer. But all I am saying is, as replying to a general debate, I am pointing out that we have gone by the recommendation of the CACP. (Contd. by 2w-kgg)


SHRI P. CHIDAMBARAM (contd.): But certainly that does not prevent any hon. Member or any expert from questioning the recommendations of the CACP and raising a debate on that issue. I am sure, the Minister will answer that debate.

SHRI D. RAJA: There is a demand by the farmers. They want a thousand rupees per quintal of rice.

SHRI P. CHIDAMBARAM: That is a demand that you should make to the Minister concerned. I have answered why this price has been fixed in this manner. Sir, let me run through the points very quickly.

Sir, there was some question about the PDS. Sir, we are not reducing the subsidy for PDS. I know that some answer was read. Please remember, I can give you the details, the Budgeted provision was higher than the previous year. You are reading the RE figures. The RE figures came down because of a decentralised procurement system and because of lower interest rate in that year the carrying cost of food of FCI came down. You should not look at only the RE figures. Because of other variables like interest rate or carrying cost coming down, the subsidy bill will come down. The question is, was the quantity of foodgrains that was subsidised remains the same, or has it come down. In fact, we have not increased the price, at all, of foodgrains since this Government came. Therefore, the subsidy, in fact, is the same subsidy; in fact, the subsidy has increased; MSP has increased; we have not increased the issue price at all. Therefore, the subsidy actually has increased.

If FCI, because of its more efficient decentralised procurement and because of lower interest rate, is able to reduce the subsidy bill, that does not mean that subsidy on per kilogram of foodgrain distributed to the poorest comes down. I am sure the hon. Member understands the point I am trying to make. Look at the BE and look at the RE.

Sir, I wish to point out that an evaluation has been made on the Public Distribution System. Dr. Arjun Sengupta said, we must have a targeted intervention. The PDS is a targeted intervention. In fact, the Left parties say that it should not be targeted and that it should be universal. The PDS, in fact, is a targeted PDS today. Look at the conclusions of the report. The report concludes that on all India basis, 36.38 per cent of foodgrains do not reach the poor. 16.67 per cent is the leakage attributed to ghost ration cards, and 19.71 per cent is the leakage in the fair price shop. It varies from State to State. If I read the figures for some States, it is extremely alarming. It is a shameful record. I will not read the figures State by State.

For all India, 36.38 per cent of the foodgrain do not reach the poor! Therefore, the fault does not lie in the supply of foodgrain. The fault lies in the manner in which the food is distributed to the poor. This is why I say, while policies can be criticised---every party is entitled to hold its policy and propagate its policy; different Governments have been there, different policies are being followed. The fault that is attributed to the policy, I think, pales in comparison to the fault that should be attributed to the manner in which the policy is implemented.

I know, there are some policy failures. But the greater part of our failures is not in policy, but is in implementation. If we can only distribute the foodgrain......

SHRI ARJUN KUMAR SENGUPTA: Who is responsible?

SHRI P. CHIDAMBARAM: I will answer who is responsible. The State Governments are solely responsible for distributing the foodgrains on the PDS. The Government of India can only give the foodgrains today. It is entirely the State Governments that are responsible for distribution. They lift the stock, they give it to the fair price shop, they issue the ration card, they weed out ghost ration cards; it is entirely their responsibility.

My party is also in State Governments. I am not running away from the problem. If the Congress party is in State Government and things are going wrong, then the Congress party is responsible. Equally, every party in the State Government is responsible. All I am trying to say is, we can certainly discuss policy failures, but whatever the policy is, unless the implementation is strong, how do we carry out policies in this country?

Sir, very quickly, let me run through a few points. Dr. Arjun Sengupta said, I am a little surprised, that these levels of growth rates have been achieved in the NDA period also. That is not correct at all.

(Contd. by kls/2x)


SHRI P. CHIDAMBARAM (CONTD): The first five years of NDA period, under one Finance Minister returned an average growth rate of 5.3 per cent. Let us get that number burnt into our memory - 5.3 per cent. In the last year -- another Finance Minister--, it went to 8.5 per cent. The average, therefore, for six years was 5.8 per cent. The average for the six years was 5.8 per cent; the average in our Government is 8.6 per cent. Therefore, I think, we should not make this mistake. Our memory should not be allowed to play tricks; the history should not manipulate our memory. Not that I -- I am sure that any Government, the next Government and next Government should aim higher. We have aimed higher, we have achieved the higher growth rate, and I am sure every Government would want to aim higher than the previous Government. Sir, very quickly, I come to Service Tax. ...(Interruptions)... Again memory is playing tricks. Service Tax was introduced not by the UPA Government; it was introduced by Dr. Manmohan Singh in 1994-95.

SHRI RAMDAS AGARWAL: I did not raise any objection why this had been introduced. ...(Interruptions)...

SHRI P. CHIDAMBARAM: I am going to answer it. ...(Interruptions)... Now services sector occupies 54 per cent of India's GDP. Can that sector go without paying any Service Tax? If manufacturing can pay Excise Duty, which is a value added tax, the services sector must also pay Service Tax, which is a value added tax. ...(Interruptions)... Just a moment, please. ...(Interruptions)... So, the First Service Tax was introduced in 1994-95. Then I think, the United Front Government added 11 services; the NDA Government added 37 services and remaining have been added by the UPA Government. But this is inevitable. From the 1st of April of 2010, we are moving towards a GST. What is the GST? It is Goods and Services Tax. Excise Duty and Service Tax will be combined into one tax called GST. Therefore, those of you who think that Service Tax is an abomination, I would respectfully request you to revise your view. Service Tax is not an abomination; Service Tax is a value added tax which falls upon services like Excise Duty falls upon goods and from 1st of April, 2010, we will have a combined tax which falls on both goods and services. The State Governments are on board, the State Finance Ministers are on board, the State Chief Ministers are on board and I think hon. Members of Rajya Sabha should also come on board and accept that GST will come on the 1st of April, 2010. Sir, there was talk of revenue forgone. I wish I could make it zero. But then hon. MPs stop writing me letters - give the exemption to this sector, give exemption to that sector and make this Duty zero Duty. ...(Interruptions)... That is a different matter. But the point is revenue forgone is because some sectors deserve relief. For example, agriculture sector deserves relief. Therefore, agricultural hand tools come at zero Excise Duty. Should I put Excise Duty on agricultural hand tools? I cannot. I should not put. Therefore, a number of sectors deserve relief, agriculture deserves relief, exporters deserve relief, and small-scale industry deserves relief. We have given Excise exemption of one-and-a-half crore to small-scale industry. Therefore, when sectors deserve relief, we give the relief. But I agree with Rahul Bajaji that while we are giving relief to deserving sectors, we are also giving relief to undeserving sectors. While we are subsidising merit goods we are also subsidising non-merit goods, while we are subsidising the goods and services consumed by below the poverty line, we are also subsidising the very same goods and services consumed by above the poverty line. But, I think, we need to take a look at this subsidy. I am willing to come back for a full discussion on subsidies; it is nobody's case that all subsidies will go. No. Even the affluent countries subsidise. We must subsidise food in this country, we must subsidise fertilisers in this country, we must subsidise some fuels in this country. But we must revisit these subsidies once in three years, once in five years, remove the non-merit subsidies, and focus subsidies only on deserving sectors and for deserving sections of the people.

Sir, there was some question about education loan, I do not know why. I am not saying that every deserving student has got a loan. I know there are Branch Managers who are unhelpful. But the point is when we took over only 3,19,337 students had got education loans and the total amount outstanding was Rs.4550 crores. (Contd by 2Y/NBR) -KLS/NBR-VNK/2Y/2.50.

SHRI P. CHIDAMBARAM (CONTD.): Today, it is 9,54,729 students and the total amount given as educational loan is Rs. 14,810 crores. This is as of June, 2007. My unverified numbers say that the number of educational loans in the country has crossed 10 lakhs. It was 3,19,000. Today, it is 10 lakhs. And, I assure you, once again, it is my intention, that every deserving student, who has got the minimum mark, who has gained admission to one of the listed courses in an accredited institution should be given an educational loan and no Branch Manager should be allowed to deny a loan and every complaint has been investigated. I can honestly and proudly claim that every complaint has been investigated to its logical conclusion until I am personally satisfied, not my officer, that the loan has been either granted -- they give eight out of every ten -- or two out of every ten cases they satisfy me that for the following reasons that student does not deserve a loan. It takes a considerable part of my time. But, I do not mind. I have committed to expanding this programme and I will ensure that this programme grow from year-after-year.

Finally, there was some question about the diploma in nursing. I do not know whether the hon. Member is here. Information does not seem to be correct. Information I have got is, if the candidate has obtained a diploma from an institute recognized by the Central Nursing Council or the State Nursing Council, irrespective of whether it is in the private sector college or the public sector college, such candidate is eligible for Government jobs.

I think, I have answered most of the points.

Sir, an hon. Member expressed his appreciation for my 'sincerity and commitment' and raised a concern that I was, perhaps, unwittingly not revealing information about the company. It is entirely incorrect. The company was investigated and a Show-Cause notice was issued. The Show-Cause notice -- kindly mark the dates -- was adjudicated on 11th July, 2003, and a demand for Rs. 240 crores of Excise Duty and Rs. 9.26 crores of Customs Duty was confirmed. This was in the NDA Government. The party filed an appeal. In the meantime, our party came into office. Our Government, my Ministry, my Department defended the appeal and the appeal was rejected by the Tribunal by an order dated 17th June, 2005. We did not lose the case; we won the case. A further appeal was filed in the High Court. My Government, my Department defended the appeal in the High Court. The High Court dismissed the appeal on 3rd May, 2006 confirming the demand. Therefore, on two appellate courts, we have won the case against the party. Now, the party has gone to the Supreme Court. The next date of hearing is a date which will be fixed. So, we are defending the case and we will defend the case in the Supreme Court and I am confident that our lawyers will be able to sustain this demand.

SHRI AMAR SINGH: I am fully satisfied with the hon. Minister.

SHRI P. CHIDAMBARAM: Sir, I will add further. Four of the officers of the company are being prosecuted and a complaint has been filed before the Magistrate on the 21st September, 2007. So, no favour is being shown to any one. There are industrialists in this House. There are people connected with industry. I have no friends. I have no enemies in industry. No industrialist in this country can claim that he is close to me or is a friend of mine or he has got favour from me. I repeat that I have no friends and no enemies in industry. Thank you.


MR. DEPUTY CHAIRMAN: Now, we shall take up for consideration the Appropriation (No. 4) Bill, 2007. The question is:

That the Bill to authorise payment and appropriation of certain

further sums from and out of the Consolidated Fund of India for the services of the financial year 2007-08, as passed by Lok Sabha, be taken into consideration.


The motions were adopted

MR. DEPUTY CHAIRMAN: Now, we shall take up Clause-by-Clause consideration of the Bill.

Clauses 2, 3 and the Schedule were added to the Bill.

Clause 1, the Enacting Formula and the Title were added to the Bill.



That the Bill be returned.

The question was put and the motion was adopted.



MR. DEPUTY CHAIRMAN: I shall, now, put up the Appropriation (No.5) Bill, 2007 to vote. The question is:

"The Bill to provide for the authorization of appropriation of moneys out of the Consolidated Fund of India to meet the amounts spent on certain services during the financial year ended on the 31st day of March, 2006, in excess of the amounts granted for those services and for that year, as passed by Lok Sabha, be taken into consideration. "


The motion was adopted.

MR. DEPUTY CHAIRMAN: Now, we shall take clause-by-clause consideration of the Bill.

Clauses 2, 3 and the Schedule were added to the Bill.

Clause 1, the Enacting Formula and the Title were added to the Bill.


That the Bill be returned.

The question was put and the motion was adopted.






MR. DEPUTY CHAIRMAN: Now, we will take up the Appropriation (Railways) No.4 Bill, 2007 and the Government Resolution.

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