GUWAHATI, Feb 28 — The Union Budget presented by the Union Finance Minister Sri Yashwant Sinha carries a few measures which are relevant to the North East. Some of these are directly relevant and the others are indirectly so. Take the directly relevant ones first. The budget provides for the continuation of subsidies to the refineries in the North East on a national basis. Now that the administered price mechanism (APM) for oil is going to be dismantled from April 1, 2002, making the oil prices market centric, this proposal should come as a relief measure to the refineries. Moreover, excise duties on a number of oil products have also been halved. Secondly, an additional amount of Rs 187 crore is proposed to be released from the non-lapsable pool. For the proper utilisation of this amount, the NE states would do well to draw up a number of schemes on a priority basis and execute the same in a time bound manner.
Thirdly, the tea industry of Assam, currently passing through difficult times should get a shot in the arm as the excise duty on tea stands reduced from Rs two to Re one per kg and also because the customs duty on tea has been raised by 100 per cent. This will neutralise the price advantage of the foreign tea producing countries. Fourthly, air travel charges for the North-east will come down on account of exemptions. This should contribute towards better connectivity. Incidentally, such a measure will also enable the training institutes in the North-East toy engage resource personnel from outside. With limited funds at their disposal, and the increased air fare, these institutes are not in a position to engage such personnel at present.
Let’s now turn to the Budget proposals which will affect the North-east in an indirect manner. The Budget seeks to raise the amount of investment in rural storehouses. The cold storage capacity will increase, which will enable the farmers to earn a more remunerative price for the agricultural products. However, given the dim power scenario in Assam, this seems to be a difficult proposition. The Budget has also come out with a comprehensive tourism development project. Six tourism circuits will be identified. Hopefully, the North-east will be one of these. Again, the entire proceeds of small savings will come to the States, adding to their total financial resources. Moreover, under the fiscal reforms incentive funds set up as per the recommendations of the Eleventh Finance Commission, the States which have successfully implemented fiscal reform measures will receive incentive awards. A sum of Rs 12,300 crore has already been provided to the 12 States as reform-linked assistance. The NE States should take note of the fact that the 11th Finance Commission has incorporated a new criterion for horizontal sharing of resources. This new criterion has been assigned a weightage of 7.5 per cent.
Furthermore, the handloom sector has not been affected adversely by any change in the excise duty structure. In fact, certain handloom garments have been exempted from excise duties. The North-east angle of the General Budget should also be considered together with the sops in the Railway Budget. Extension of existing lines, increased frequency of the Rajdhani Express, introduction of new trains to NE and the Guwahati-Dimapur Jan Shatabdi Express would all improve connectivity in the North-east. The benefits of the various budgetary proposals for the North-east, however, can be realised only when fiscal accountability and discipline are ensured. Towards this end, there is a strong case for the introduction of Zero-Based Budgeting (ZBB) in a few selected departments to beging with. To insist on a fundamental point, ZBB does not mean a cut in public expenditure down the line but only a cut in unproductive expenditure and an increase in expenditure in the priority areas. The better part of wisdom suggests that in a State like Assam weighed down by the resources crunch, public expenditure has to be cost-effective.