Pranab could have empowered local Governments: Dr. JP

Lok Satta Party President Dr. Jayaprakash Narayan was all praise for Union Finance Minister for reining in fiscal deficit and putting the economy back on the growth path but faulted him for failing to empower the third tier of government – the local bodies – with devolution of resources.

Commenting on the Union Budget for 2010-11, Dr. JP pointed out that the 13th Finance Commission recommendations along with Centrally-sponsored schemes would transfer nearly 3.5 lakh crore to Rs.4 lakh crore from the Government of India to States. Of it, a mere 1.5 percent amounting to less than Rs.10000 crore was to go to local bodies. Without devolution of resources to local bodies in tune with the 73rd and 74th Constitutional amendments, there would not be any improvement in people’s lives.

Dr. JP complimented Mr. Pranab Mukherjee for taking steps towards fiscal consolidation with calibrated withdrawal of stimulus packages and bringing down the fiscal deficit from 7.8 % in 2008-09 to 6.9 percent in 2009-10 and planning to reduce it to 5.4% in 2011-12. He also gave credit to the Finance Minister for the country inching towards a growth rate of 7.2% in 2009-10 notwithstanding poor rainfall in many parts of the country, and aiming at a growth rate of 8.5 percent in 2011-12.

Dr. JP, who described the increase in petroleum product prices as inevitable whichever party happened to be in power, regretted that the Union Finance Minister had not paid any attention to subsidizing public transport. The Union Finance Minister, who levied a cess on coal to encourage clean technologies in the context of global warming, should have thought of public transport as a complementary means to curb emission of harmful gasses by the ever proliferating private transport vehicles.

Although Mr. Pranab Mukherjee held forth on poverty eradication – the ruling party’s mantra since 1971 --, he was short on action. Poverty could not be eradicated unless the Government focused on providing quality education and health care to every child and on enhancing skills of the millions of the unemployed. It was the fear over livelihood prospects that prompted the youth to take to agitations in Andhra Pradesh.

Mr. Pranab Mukherjee, one of the senior most politicians with rich experience, did not display vision in making a frontal assault on poverty through promotion of education and healthcare. Instead, he confined himself to schemes like the NREGS that fetched votes.

Mr. Pranab Mukherjee has also failed to focus on improving agricultural productivity and contented himself with allocating a token Rs.400 crore to Eastern India.

Dr. JP, who welcomed the relief given to income tax payers, wondered why the Union Finance Minister had not bothered about raising the tax base. The Union Government’s direct tax revenue constituted a mere 12% of the GDP whereas it is 40% in the U.S. and nearly 50% in the U.K.