NEW DELHI, Feb 28 — The Union Budget is unlikely to bring immediate relief to the fund-starved north-eastern States despite an enhanced Central plan allocation of Rs 5,016 crore, even as Union Finance Minister Yashwant Sinha sought to bail out the oil and tea sectors by continuing with subsidies to North-east-based refineries and a hike in customs duty on tea. Although the Union Budget for the year held no new surprises for the region, the Union Finance Minister ensured adequate Central funds for pending projects. The total allocation for the Department of Development of North-Eastern Region (DONER) has been fixed at Rs 470.72 crore out of which total plan outlay for the North Eastern Council (NEC) has been capped at Rs 450.42 crore. The apprehension of Assam’s oil sector over dismantling of the Administered Price Mechanism (APM) has been partly taken care of with the Union Finance Minister proposing to charge excise duty at half the normal rates otherwise applicable to petroleum products. The proposals which have been given effect from April 2002, include special dispensation of excise duty structure for the petroleum refineries located in the north-eastern States, the Minister said. Similarly, the customs duty on tea has been increased to 100 per cent, while excise duty on tea was reduced to Re 1 from Rs 2.
However, in both cases, the measures were described as unsatisfactory as demands were for 100 per cent excise duty exemption on petroleum and tea, besides additional subsidies on transportation costs. As for the flood control works in Brahmaputra and Barak valleys, a Central assistance of Rs 10 crore has been earmarked. This would be in form of grant. The Brahmaputra Board has been fixed an outlay of Rs 20 crore, which is in form of grants-in-aid. The allocation marks an increase to Rs 80 crore from last year’s allocation of Rs 45 crore. The Budget has cleared new schemes for protection of Majuli island and Dihang project. Outlay for other schemes of flood control included an allocation of Rs 13.90 crore, provision of Rs 45 crore for Pagladia project and Rs 5 crore for Harrange drainage scheme. Air travel to and from the North-east is also slated to be cheaper with the Union Finance Minister proposing to exempt inland air travel tax. Earlier, the tax was exempted for air travel within the North-east.
As for development of the north-eastern region, Sinha said, “I am glad to inform the House that during the current year, an additional sum of Rs 500 crore was provided to the north-eastern States from the Central pool set up in 1998-1999.” This is Rs 187 crore more than last year, he said, announcing that the provision for expenditure in north-eastern States out of the Central plan of various ministries has also been increased from Rs 3,457 crore in the current year to about Rs 5,016 crore next year. As for bailing out States hit by financial crisis, all that the Union Finance Minister promised was to introduce the Fiscal Responsibility and Budget Management Bill for consideration in the House during the current session itself. “The recommendations of the Parliamentary Standing Committee of Finance are receiving our attention and I propose to bring the Bill for consideration in this august House within the current year.” The Budget has made a provision of Rs 1.32 crore for introduction of Voluntary Retirement Scheme in North-Eastern Regional Agricultural Marketing Corporation (NERAMAC). As part of implementation of BIFR rehabilitation package, a token provision has been made for VRS. A sum of Rs 15.40 crore has been earmarked for the North Eastern Development Finance Corporation (NEDFi) while the North Eastern Handicrafts and Handloom Development Corporation has been given a non-plan loan of Rs 1.50 crore for its ongoing restructuring works.
Meanwhile, Sinha’s Budget did not evoke much enthusiasm among the MPs belonging to the North-east. Reacting to the Budget, NCP MP and former Lok Sabha Speaker, P A Sangma described it as disappointing as far as the North-east was concerned. What Sri Sinha has done in the Budget is bring in some cosmetic changes, while the region required heavy investments in infrastructure leading to generation of employment. Further, the flood problems of Brahmaputra river has been ignored. The expectation was that the flood problem would be declared as a national problem but nothing was mentioned in the Budget, Sangma said. Sangma said the MPs belonging to the North-east would gather and discuss the implications of the Budget. Echoing similar views, the chairman of the North-east MPs’ Forum P R Kyndiah said insofar as the main issue of removing regional imbalance was concerned, the Budget has done nothing to address it. Although allocation of Central funds has been increased, it is cosmetic in nature and we will have to wait and see how they are implemented at the grassroots level. He said the Budget was prepared in an exclusive manner without consulting the concerned MPs and State governments of the region.
Congress MP Paban Singh Ghatowar described the measures proposed in the Budget as half-hearted pointing out that while demand was for abolition of excise duty on tea, the Budget has only reduced it to Re 1. This may have negative impact on the tea industry which is a labour-intensive industry. He added that what was needed was more thrust on infrastructure projects in the region. Describing the Budget as stereotype, Santosh Mohan Dev said the Budget would not help Assam much. Although there has been an increase in allocation for the North-east it is not yet clear where the funds would be spent. The North-east MPs are meeting the minister in charge of North-east, Arun Shourie for seeking clarification. Meanwhile, the North-east MPs’ Forum is scheduled to meet Sri Shourie on March 6 to discuss about development, unemployment and devolution of funds out of non-lapsable pool of Central funds.