The Hindu : Jaswant Singh rolls back fertilizer price hike

Online edition of India's National Newspaper
Wednesday, Mar 12, 2003

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Jaswant Singh rolls back fertilizer price hike

By Our Special Correspondent

NEW DELHI MARCH 11. The Union Finance Minister, Jaswant Singh, today rolled back the increases in fertilizer prices he had announced the Union budget on February 28 but did not yield on the additional cess he had imposed on petrol and diesel.

In another additional measure, he announced further sops for Government employees by reducing 100 basis points (one per cent) the interest on loans taken by them for housing, computers or purchase of transport vehicles. The States too will get the benefit of one per cent lower interest on fresh loans from the Centre.

These concessions came in the course of Mr. Singh's reply to the general debate on the budget in the Lok Sabha. Throughout the three-day debate, there had been demands from all sections of the House, including the BJP and allied party members, for reversing the increase in fertilizer prices while the Opposition also demanded a rollback of the additional cess on diesel. Mr. Singh declined to touch the issue of interest rates on small savings, despite a vociferous demand from the Opposition.

The rollback of fertilizer prices came towards the end of the speech with the Minister not making much of the issue. Having explained the complex factors involved in fertilizer subsidy which he said was mostly going to high cost fertilizer factories, he said that if all sections of the House were against the increase in fertilizer prices, then let them not be raised. In fact, the decision was announced in such an innocuous manner that many members missed the import of the announcement and demanded that Mr. Singh make a categorical statement on it.

Mr. Singh then obliged them by standing up again and making a formal announcement that "I take back the increases in fertilizer prices that I had announced in the budget."

He utilised the early part of his response to the debate to dispel "the misconceptions" of the members about various aspects of the budget. Starting with the criticism that the fiscal deficit target next year would not be maintained, he said the Government had made realistic projections of revenue receipts and that there was no underfunding of the budget proposals which could lead to runaway expenditure. Also, agriculture was expected to pick up in the coming fiscal, resulting in a higher growth in gross domestic product (GDP). Mr. Singh explained the rationale behind the special focus areas of the budget, health, textiles, gems and jewellery and tourism. While the Re. 1 per day scheme for medical cover was "the most outstanding scheme than ever announced before, he said the idea to push the health sector was to make India a major health destination in the world. "If our people can make such a mark on international health scene, why can't it be done here? After all, they are from the same stock and all that we need is better health infrastructure and improved post-operative care."

Eight of the 48 identified road schemes had already got their detailed projects reports ready and tenders would be announced soon.

The Rs 2,000 crores funding in the budget was mainly for the railways and airports as roads and ports had their own revenue sources.

Mr. Singh detailed out the measures taken to boost agriculture, including the provision of cheap credit for farmers. He said from April 1, a new prime lending rate (PLR) would be announced by the Reserve Bank and agriculture and the small scale sector would then get credit at rates two per cent below the PLR.

The rollback of fertilizer price increases was expected to cost the exchequer about Rs 700 crores. The House later passed by voice vote a vote-on-account.

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