People's Democracy

Bengal Budget Aims At Employment Generation

And Pro-People Development

B Prasant

THE budget of the Bengal Left Front government for the financial year 2005-2006 has increased the plan outlay by a whopping 68 per cent and the total amount involved is Rs 7051 crore, up from Rs 4184 crore.  The estimated growth of the state domestic product or SDP is 8 per cent.  The budget has a deficit of Rs 105 crore, which would be more than adequately covered by resource mobilisation, the finance minister of the state government, Dr Asim Dasgupta assured the state assembly.

The budget contains a package of proposals to provide welfare to the poor and the middle class.  These include:

• Distribution of ceiling surplus land among the rural landless

• Health insurance for agricultural labour

• Employment scheme for the urban poor

• Special package for the less developed areas, and

• A mass health programme worth Rs 100 crore

The enhanced plan outlay has been marked in education where the target is now Rs 622 crore as against Rs 201 crore earlier. The state shall now spend 17.8  per cent of the budget in education. The outlay in power has gone up from Rs 1559 crore to Rs 2089 crore.  The industrial outlay stands at Rs 145.1 crore as against Rs 66.5 crore last financial year.

The budgetary allocation has gone up for land and land reforms, agriculture including plantation, animal resources development, mass health, refugee rehabilitation, roadways and bridge development, minorities development, development of the Sunderbans and the northern and western Bengal, and welfare of the backward classes.

The state budget has called for the additional generation of six lakh of employment.  Of these, self-help projects linked to small industries and the service sector will account for three lakh jobs.  Two lakh jobs would be created out of schemes for the expansion of irrigation schemes.  When this is done, two lakh hectares of additional land will be brought into cultivation and the amount of irrigated land will stand at 70 per cent of the agricultural landmass in Bengal.

Development of fisheries will account for an additional 75,000 jobs. Animal resources development will create 54,000 additional employment.  According to the latest figures available with the National Sample Survey or NSS, the unorganised small-scale sector in Bengal creates an additional employment worth two lakhs of people every year.  The budget calls for increase of loan components available for small-scale industries to Rs 1500 crore.  An additional Rs 15 crore has been earmarked for cluster growth of small-scale industries in the districts.

The Value Added Tax or VAT will commence from April 1, the finance minister assured the assembly.  The introduction of VAT will:

• Provide a full set off for input tax as well as for tax on previous purchases

• It will abolish the burden of several existing taxes such as turnover tax, surcharge on sales tax, additional surcharge, and special additional tax

• Rationalise overall tax burden

• Reduce the price level in general

• Make the tax structure simple and transparent, and

• Help increase revenue

Under the VAT system which will cover 550 goods, two basic VAT rates – of 4 per cent and 12.55 per cent – shall prevail, plus a specific category of tax-empted goods (46 items).  Under the exempted category, the commodities will comprise natural and unprocessed produces of the unorganised sector.  All food crops will be tax-free.  270 goods will come under the 4 per cent regime.  These goods will be items of common consumption and necessities such as medicines, all agricultural and all industrial produce, capital goods, and ‘declared’ goods.  The total expenditure is estimated to stand at Rs 40,383 crore.  The income will be Rs 40,278 crore.  The deficit of Rs 105 crore would be met by the excise duty on Indian Made Foreign Liquor or IMFL.

With the fallout of the recommendations of the Twelfth Finance Commission for Bengal being transient and fruitless, the state has concentrated on building up its own resources and reduction of non-plan expenditure.  At the same time, the non-plan budget has called for increase in the emoluments and stipends paid to widows, elderly persons, physically challenged people, craftsmen, weavers, kisans, and fishing folk. 

Later, addressing a press conference Dr Asim Dasgupta made it quite clear that the state LF government could come out of the financial handicap into which it had been pushed because of the wrong policy outlook of the previous union government that was led by the BJP.  Between 1999-2000 and 2004-2005, the state could increase mobilisation of taxes by 91 per cent.

The growth of the non-plan revenue could be restricted to a rate of 91 per cent.  The ratio of tax versus production has increased favourably for the economy. The proportion of revenue deficit to tax realisation has, on the other hand, gone down.  The budget, he pointed out, aims at not merely pro-people development but also generation of employment.