71. I believe that the Social Security cover needs to be widened to minimize the
miseries of our people below the poverty line. Accordingly, I propose to introduce two
more schemes during the next financial year:
(i) A special scheme for landless agricultural labourers, the
Khetihar Mazdoor Bima Yojana, which will provide benefits of insurance cover as available
under Janashree Bima Yojana and a pension of Rs 100 per month, to the beneficiary on
attaining the age of 60 years. In the case of beneficiaries who join the scheme at a young
age, some periodical payments at the end of every ten years are also envisaged. The
beneficiaries will be required to make a small contribution towards the premium.
(ii) A Shiksha Sahyog Yojana, to provide an education allowance
of Rs 100 per month to the children of parents living below the poverty line, to meet the
expenses of education during their studies from 9th to 12th standard, so that a needy
student is not deprived of the opportunity to continue his/her education for want of
funds. This will be available to subscribers of the Janashree Bima Yojana.
These schemes will be managed by LIC.
72. Meanwhile, I have some good news for workers. The wage ceiling for coverage
under the EPF and MP Act, 1952 has been enhanced from Rs 5000 to Rs 6500. To promote the
welfare of employees I propose to enhance the ceiling for Government contribution of 1.16
per cent of monthly wage of employees to the Pension Fund from Rs 5000 to Rs 6000 per
month. The extra expenditure on this account is estimated to be Rs 77 crore per annum.
73. Whereas the organised sector is at present covered by various pension,
provident fund and gratuity schemes, the unorganised sector does not have adequate social
security coverage. I am asking the Insurance Regulatory Development Authority to look into
all these issues and provide a road map for pension reforms by October 1, 2001.
Journalists Welfare Fund
74. Journalists have to increasingly take greater risks in covering terrorist and
other violence prone incidents. As an acknowledgement of their services and sacrifices,
and with the expectation of a better treatment at their hands, I propose to set up a
Journalists Welfare Fund with a contribution of Rs 1 crore under the grants of Ministry of
I&B. My colleague the I&B Minister will announce the details of the scheme.
Entertainment
75. Our entertainment industry, particularly the film industry not only provides the
much needed fantasy to millions of our people who live in an otherwise harsh and cruel
world, it has also emerged as an important segment of our economy and holds great promise
for the future. Two years ago, I provided for this industry the same tax exemption that
was available for merchandise exports. A few months ago, the Government issued a
notification under the IDBI Act whereby entertainment industry including films has been
declared as an industrial concern. Banks are in the process of finalising guidelines for
financing such projects that are bankable. I hope that the film industry will take full
advantage of these measures to bring about a greater degree of professionalism and
transparency in its operations, and will not do things chupke chupke and certainly not
chori chori.
Fiscal Consolidation
76. As I have already stated the most serious problem confronting the economy is the
poor state of the fiscal health of both the Central and State Governments. The combined
fiscal deficit of the two together is in the region of 10 per cent of GDP. I have often
been described as a fiscal fundamentalist. Some have gone to the extent of calling me a
fiscal terrorist. Why am I so concerned about the fiscal deficit? Let me try to explain.
The total receipts of the Central Government in the current year according to BE are about
Rs 281,000 crore. Of this amount, Rs 72,000 crore is States’ share of the Central
taxes and grants. The Central Government is, therefore, left with Rs 209,000 crore. On the
expenditure side, about Rs 101,000 crore was to be spent on interest,
Rs 59,000 crore on defence, Rs 23,000 crore on major subsidies and Rs 16,000 crore on
pensions. The net amount left for meeting all other Government expenditure totalling Rs
123,000 crore was, therefore, only Rs 12,000 crore. I have, therefore, to borrow Rs
111,000 crore in the current year to make both ends meet. The most worrisome aspect is
that over 70 per cent of my borrowing, i.e., Rs 77,000 crore was for financing
unproductive revenue expenditure. This will add to my interest burden next year forcing me
to borrow more and ultimately fall into a debt trap. I am deeply conscious of the burden
which is being placed on future generations, by our extravagance. I cannot allow this
situation to continue.
77. As promised in my earlier Budget Speeches, I appointed the Expenditure Reforms
Commission last year and introduced the Fiscal Responsibility Bill in this House in the
last session. The bill seeks to reduce the fiscal deficit to 2 per cent and completely
eliminate the revenue deficit over the next five years.
78. A number of initiatives have already been taken to contain, in particular, the
growth of non-plan expenditure. I have not allowed any increase in non-plan expenditure
this year. Consequently, for the first time in many years, the fiscal deficit target fixed
in the budget has indeed been achieved, and remains at 5.1 per cent in the RE of the
current year. The target of 3.6 per cent revenue deficit has also been achieved.
Expenditure Management
79. I intend to carry forward the process of bringing about
structural changes in the composition of Central Government expenditure and effect economy
in non-plan revenue expenditure with greater vigour while improving the quality of plan
expenditure. For this, I propose to take the following initiatives:
1. User charges for services provided by government and its
agencies will be revised keeping in view the increased cost of these services. A portion
of this increase will be provided to enhance the maintenance and quality of these
services.
2. Similarly, postal rates will be revised moderately to contain
the rising postal deficit.
3. All requirements of recruitment will be scrutinized to ensure
that fresh recruitment is limited to 1 per cent of total civilian staff strength. As about
3 per cent of staff retire every year, this will reduce the manpower by 2 per cent per
annum, achieving a reduction of10 per cent in five years as announced by the Prime
Minister.
4. The Surplus Pool under the Department of Personnel will be
streamlined and equipped to redeploy and retrain surplus staff. Employees in the Surplus
Pool will also be offered an attractive VRS package.
5. Standard licence fee (rent) on government accommodation will
be enhanced by 50 per cent for Group A, 25 per cent for Group B and 15 per cent for other
categories of staff with effect from April 1, 2001.
6. Facility of LTC to Central Government employees will be
suspended for 2 years for the remaining part of the four-year block period except for
employees who are entitled to last LTC before retirement.
7. Use of Information Technology in government activities with
large public interface will be maximized to promote efficiency. For this purpose,
operations like GPF, pension, pay and accounts offices, passports, income tax, customs,
central excise, will be fully computerized by March 31, 2002. Public sector banks and
insurance companies are also being asked to complete computerization of their operations
within this period.
80. The Expenditure Reforms Commission, which was set up last
year, has presented reports concerning downsizing in 6 Ministries and Departments. These
include Department of Economic Affairs, Ministry of Information & Broadcasting,
Ministry of Coal, Department of Heavy Industry, Department of Public Enterprises and
Ministry of Small Scale Industries. Reports of the Commission concerning other Departments
will also be received within the next six months. These recommendations will be
implemented by July 31, 2001 and identified surplus staff transferred to the Surplus Pool.
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