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Chidambaram Holds Pre-Budget Consultations

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Demands like doubling of existing income tax slab, interest-free loan to small farmers and plugging leakages in the expenditure of funds for Left wing extremism areas were made at a pre-budget consultation held by Indian Finance Minister P Chidambaram on 14 February with AICC leaders.

In his opening address, Chidambaram talked at length about the financial constraints before the government but expressed the hope that the growth rate will further improve from the existing 5 per cent rate of GDP, sources said.

The overall refrain in the consultations was that the budget has to be people-oriented with equal focus on farmers as well as the middle classes as elections are approaching.

Amid indications that the budget will be a "please all" exercise, the finance minister told the AICC leaders that this budget, being the last one before the next Lok Sabha elections, will be a major financial exercise.

Touching upon the issues of global meltdown and recession particularly in the Eurozone, Chidambaram underlined the importance of fiscal consolidation and how improvements can be made in the current account scenario.

"The finance minister told us what are the difficulties and how the Indian economy was kept at a balance despite the tough global economic scenario. 32 of the 46 office bearers present spoke on various issues like those related to farmers, weavers, education, health and income tax," party general secretary Janardan Dwivedi told reporters after the meeting.

Different cells and departments of the AICC as well as individual leaders submitted elaborate budget request proposals to the finance minister on this occasion.

AICC secretary P Sudhakar Reddy demanded that the present basic tax exemption limit should be raised from Rs 2 lakh to Rs 4 lakh and that the female assesses should be given higher exemption limit. One of his suggestions was a system of special tax exemptions should be introduced to encourage family planning.

Party leader Ajit Jogi submitted a 65-point list of proposals to the Chidambaram including tax reduction in many fields of agricultural activities. .

There were also demands by many leaders that there is a need to bring more clarity on service tax as it is being interpreted differently in different states.

There was also a suggestions there is a need to cut down expenditure in the government.

Jogi said the funds given by the Centre for its flagship programmes is being appropriated by the Opposition-ruled states and demanded that photographs of Congress president and the prime minister should be put out wherever any of these schemes is being implemented.

Tytler and Motilal Vora also echoed concern over Centre's money being used by the Opposition-ruled states in their names, the sources said.

He also rued that the funds allocated for Tribal Sub Plan and Scheduled Castes Plan are not being spent accordingly in many states.

Amid concern over the impact of rising diesel prices, senior party leader Oscar Fernandes said there was a need to bring down the dependence on petroleum import and focus on alternative sources of energy like ethanol.

There was also a suggestion that interests should be waived and attempts should be made to recover the principal amount from bad loan accounts, where recovery has become almost impossible.

There were also demands that there was a need to segregate certain sectors where the subsidy in diesel and LPG should continue and that there was a need to differentiate between subsidy to the haves and the have nots.

Sources said Tytler said there was a need to take measures in the budget, which help the party connect with people more now.

Minority Department Chairman Imran Kidwai demanded more funds for minority institutions and increase in fund outlay of the Minority Affairs Ministry.

He also said that a number of communities like the Most Backward Classes (MBCs) are left out and there is a need for special schemes for their financial inclusion, a concern also shared by leaders like Mohan Prakash.

Kidwai also raised the issue of problems of minorities in getting micro loans and demanded that the conditionalities for small loans to SCs/STs and minorities should be the same.

Tom Vadakkan demanded that the CGHS facility should be provided to all PIB accredited journalists.

The meeting also saw demands by women for gender budgeting. Fernandes wanted the tax on bidis to be reduced saying that employment is coming down in the labour intensive due to the taxes.