'Budget to rejig tax system based on Kelkar report'

  • Press Trust of India, PTI, New Delhi
  • |
  • Updated: Feb 18, 2003 16:01 IST

Terming the ambitious eight per cent Tenth Plan growth target as achievable, President APJ Abdul Kalam on Monday indicated that the Budget would restructure the tax system on the basis of the roadmap laid out by the Kelkar panel.

"The imperative of fiscal consolidation requires that public finances are managed better. This can take place only through greater collection of revenue and controlling unproductive expenditure," Kalam said, adding Kelkar committee's reports are a road map for creation of a "stable, transparent and efficient tax regime"

In his first address to the joint sitting of Parliament, Kalam said the ambitious eight per cent growth set out in the Tenth Plan was "achievable". It has distinguished itself from the previous plans by underscoring that it is not merely a resources plan, but a reforms plan, he pointed out.

Kalam said the process of disinvestment has gained irreversible momentum as part of the wider policy of economic reforms.

Elaborating on disinvestment, Kalam said state governments are following this policy, which showed that there was "consensus" in practice.

He said the proceeds from disinvestment reduce the burden of public debt, thereby releasing public resources for social and infrastructure sectors.

During the current year, out of 13 cases of disinvestment so far, 11 were of loss-making units, he said, adding the procedures for disinvestment has established "benchmark" norms for transparency, efficiency, administrative simplicity and non-discretionary decision-making.

On the value added tax (VAT) system coming into being from April 1 2003, Kalam sought to set at rest apprehensions of the states that they would lose revenue in the initial period, saying the Centre has assured compensation for revenue loss, if any.

Kalam said the Tenth Plan aimed at faster growth with a sronger thrust on employment generation and equity and targets five crore additional employment and self-employment opportunities.

It has also broadened the agenda of reforms by showing the categorical imperative to remove numerous non-financial barriers to faster development through reforms in civil services, judiciary, education and above all in governance at all levels including Panchayati Raj Institutions.

Underlining that the goal was to transform India into a developed nation by 2020, Kalam said he called upon the Centre and state governments to evolve an action plan for making Tenth Plan a people's plan and development a people's movement.

"To achieve this, they should concentrate on two mantras: effective implementation with people's participation and effective communication for people's participation," he said.

"A key element of "vision 2020" would be providing urban amenities in rural areas by providing physical, electronic, knowledge and market connectivities.

Kalam said the Government intended to bring in a new civil aviation policy which will liberalise the sector, usher in regulated competition, attract investment and modernise airports to provide affordable, but world class services to passengers.

The IT and telecom revolution, which brought laurels to the country and professionals, has brought dramatic improvement in quality and dramatic fall in tariffs.

The telecom revolution has also empowered postal services in the country and post office network in India is poised to offer many new value added services, he said.

The recent dip in estimates of the GDP growth to 4.4 per cent has been entirely due to the shortfall in agricultural production, Kalam said: "this has once again highlighted the need to rescue our agriculture from its excessive dependence on the monsoon by increasing public investments in irrigation and in all other inputs that increase farm productivity."

"The Government has a coherent and well-integrated strategy for boosting economic growth. Despite the global slowdown, the past year has been a fairly good year as India continues to be rated amongst fast growing economies," he said.

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