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Subsidy for small tea growers

By Our Special Correspondent

NEW DELHI, FEB. 4. Some fresh announcements such as a special subsidy for small tea growers, a new venture capital fund to encourage small and medium enterprises, partial relief from service tax for tour operators and upgradation of Nagpur airport to the status of an international airport formed the major part of the Finance Minister, Jaswant Singh's reply to the debate on the interim budget in the Lok Sabha today.

The House later passed the budget in the absence of the Opposition, which staged a walkout at the end of the Minister's reply. In the process, some of the cut motions proposed by Opposition members were not taken up and when Priyaranjan Dasmunshi and Pawan Bansal of the Congress returned and protested against this, the Speaker, Manohar Joshi, told them that instead of walking out, they should have stayed back and participated in the proceedings.

The Finance Minister devoted much of his hour-long reply to counter the points made by the Leader of the Opposition, Sonia Gandhi, who had picked holes in the Government's claim of the "feel good factor." Citing figures to refute Ms. Gandhi's charges, the Minister said allocation for agriculture had been enhanced by 44 per cent, the farm income insurance scheme expanded, farm loan rates were being lowered and the Minimum Support Price for sugarcane enhanced. Similarly, the allocation for the Sarva Shiksha Abhiyan had been increased from Rs 1,950 crores in the 2003-04 budget to Rs 2,732 crores in the revised estimates and further to Rs 3,057 crores in the coming year. He also recounted the low fiscal deficit of 4.8 per cent of the Gross Domestic Product reported by the Government and said other targets set in the Fiscal Responsibility and Budget Management Act "had been more than met."

"After all this, it is entirely possible that she and her party are not feeling good. But please don't spread rampant defeatism and despondency," he told the Congress benches. Ms. Gandhi, incidentally, was not present in the House.

For the plantation industry, Mr. Singh said a price stabilisation fund had been set up for rubber, coffee and tea and promised additional allocation if need be. However, he said the tea industry required special help and for this a package had been announced earlier. In addition to that, the Government would immediately launch a special subsidy scheme for small tea growers, providing them Rs. 8 a kg as subsidy for four months. The subsidy scheme would cover tea growers both in north and south India.

To the point that many tea gardens had closed down and their managements disappeared, he said though the Central Government was intervening on behalf of the growers, "the State Governments also have a role to play.'' Members were, therefore, urged to take up the matter at the State level too.

The Minister announced that the Small Industries Development Bank of India (SIDBI) had been asked to float a SIDBI Growth Fund to provide venture capital to young unemployed who wanted to start their own enterprise. The Fund would have an initial corpus of Rs. 100 crores which would be expanded to Rs. 500 crores in due course.

On the specific request of the wood-free particle and fibreboard industry, Mr. Singh withdrew the eight per cent excise duty imposed on this sector in the recent past. The exemption was being restored on environmental considerations, he said.

For tour operators, he said only 10 per cent of the payment received by them would be subject to service tax since such operators had to spend money for many services connected with their operations.

He also announced the immediate assigning of international status to Nagpur airport in view of the operations being undertaken and also on consideration that the Vidharba region of Maharashtra was by and large backward and required development.

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