Railway Budget 2013-14: Passengers Fare Untouched, Hike in Freight Tariff

Railway Minister Pawan Kumar Bansal presented the Railway Budget for 2013-14 in the Parliament on February 26. The Budget spared passengers a fare hike, but raised various charges on tickets as well as freight tariff to net in additional Rs 4,683 crore a year.

Plan Outlay

The railway minister announced the highest-ever plan outlay of Rs 63,363 crore for the public sector behemoth. Of this, Rs 14,260 crore would be raised from internal resources with Rs 26,000 crore budgetary support. Other sources of financing include Rs.14,260 crore from railway's internal resources and Rs.2,000 crore from railway's share in road safety fund. There is also a plan to raise Rs.15,103 crore from the market and mobilize Rs.6,000 crore through Public-Private-Partnership (PPP) route to fund its expansion plans in 2013-14.

While tatkal charges for sleeper class have been raised by Rs 15 to Rs 25 and for AC chair car from Rs 25 to Rs 50, tatkal charges in AC-3 tier have been increased by Rs 50 and AC-2 tier and executive class by Rs 100. The reservation fee for AC First and Executive classes has been raised to Rs 60 from Rs 35 and that of First Class and AC-2 doubled to Rs 50. Reservation fee for AC chair car, AC-3 economy and AC-3 tier has been increased to Rs 40 from Rs 25 and supplementary charges for superfast trains raised between Rs 5 and Rs 25.

Growth Rate

It is creditable that an operating ratio of 88.8 per cent is being achieved during the current year 2012-13, even after fully repaying the loan of Rs 3,000 crore along with interest that was taken from the Ministry of Finance, and after setting aside Rs. 9500 crore for Depreciation Reserve Fund (DRF). Against this, the budget estimate for 2013-14 projects an Operating Ratio (OR) of 87.8 per cent with a DRF appropriation of only Rs.7500 crore. This once again highlights the need for a more reliable index of financial performance rather than the present OR, which can be tweaked to suit by appropriately adjusting the DRF allocation. It is hoped that the proposed revamping of the accounting system will look into this aspect.

The Gross Budgetary Support (GBS) component out of this was projected as Rs. 2.5 lakh crore. It is rather distressing to note that the 12th Five-Year Plan approved by the Planning Commission has scaled down the Railway plan to Rs. 5.19 lakh crore with a GBS component of Rs. 1.94 lakh crore.

In other words, the government is not in a position to provide for a much higher rate of growth of the railway sector than it has historically done. The long-term implication of this modest growth rate on the economy as a whole needs to be looked into.

Highlights

* No increase in passenger fares

* Rs.6,600 crore increase in earnings from fare adjustment in January

* Rs.63,000 crore investment in 2013-14

* 1,047 million tons freight loading estimated during 2013-14

* Passenger earnings of Rs 42,000 crore estimated in 2013-14

* Indian Railways Institute of Financial Management to be set up at Secunderabad

* Chair at Delhi to promote research in reducing carbon footprint

* 22 new lines to be taken up in 2013-14

* Superfast and Tatkal charges to rise

* 67 new Express trains to be introduced

* 27 new passenger trains; run of 58 trains to be extended

* New debt service fund to be set up

* Six more Rail Neer bottling plants to be set up

* Losses mounted from Rs.22,500 crore in 2011-12 to Rs.24,600 crore in 2012-13

* Planning Commission pegged 12th Five-Year Plan at Rs.125.19 lakh crore

* Fall in accidents - per million accidents down from .41 to .13

* Aim to eliminate 31,846 level crossings

* Will close fiscal 2012-13 with fund balance against previous deficit; need to build fund balance to Rs.30,000 crore by end of 12th Five-Year Plan

* Operating ratio of 88.8 percent achieved

* Dividend reduced from 5 to 4 percent

* Electrification of 1,200 km to be completed this year

* 72 additional suburban services in Mumbai and 18 in Kolkata

* Complementary passes of freedom fighters to be renewed every three years instead of annually

* New wheel factory to be set up at Rae Bareli

* Greenfield EMU manufacturing facility at Bhilwara

* Railway energy management company to be set up to harness solar and wind energy

* 1,000 crossings to be energized by solar power

* 1.51 lakh vacancies to be filled up

* Locomotive cabs to be air-conditioned

* Azadi Express to be introduced to travel to places associated with freedom struggle

* India in 1 billion ton freight club

* By end of 2013-14, 1,500 km of contracts to be awarded for two dedicated rail corridors

* Rs.1 lakh crore target set for public-private-partnership route

* Free Wi-Fi to be provided on some trains

* Rs.100 crore for improving stations in New Delhi

* 179 escalators and 400 lifts at A 1 and other select stations

* E-ticketing through mobile phones

* SMS alerts for passengers on reservation status

* Next generation e-ticketing system by end of 2013

Assessment

The 2013-14 Budget has skirted the prickly issue of structural reforms. There is no mention in the budget of even the proposal in the last budget to expand the Board to include two members to look after PPP /Marketing and safety/research. The proposal has perhaps been shelved.

Overall, the budget conveys an impression of an exercise to keep the system going very much as it has done in the past, at a modest growth rate. Whether such a rate of growth of this key infrastructure sector will be sufficient to sustain the projected growth rates of the economy as a whole remains to be seen.

Nevertheless, it is a matter of pride that the Indian Railways has joined the select club of world railways moving more than a billion tons of freight annually, and is entering into yet another exclusive group of railways moving more than 10,000 tons per train. Some concomitant steps that should improve maintainability, reduce maintenance costs and improve staff productivity such as widespread introduction of track friendly/self-steering bogies and doing away with the anachronistic institution of goods guards, have not been explicitly mentioned in the budget. Hopefully, these and other steps will be implemented.

Poverty in India: Country's Rural Population Lives on Less Than Rs 35 a Day

Poverty is a stark realty in India. There are more poor people here than in the 20 poorest African countries. More Indians have an access to mobile phones than toilets. Hunger and malnutrition persist. Figures about the extent of poverty released occasionally do spark debates and political point-scoring for a day or two but are then forgotten. They do expose, however, even if for a short while the ugly side of India’s much-touted growth story. By and large, what is wrong and what needs to be done are known.

Keeping the aforementioned points in view, the National Sample Survey Organization (NSSO) has recently carried out the 66th round of National Sample Survey (NSS). The report states that around 60 per cent of India's rural population lives on less than Rs 35 a day and nearly as many in cities live on Rs 66 a day, reveals a government survey on income and expenditure.

The statistics pertaining to income and expenditures of the citizens presented by the NSSO has revealed that food accounted for about 57 per cent of the value of the average rural Indian household consumption during 2009-10 whereas it was 44 per cent in cities. And this, when 60 per cent of India’s rural population lives on less than Rs 35 a day and an identical percentage in several cities lives on Rs 66 per day.

If the average monthly per capita consumption of cereals was 11.3 kg in rural areas and 9.4 kg in cities, then the survey also pointed out that 10 per cent of the population at the lowest rung in rural areas lives on Rs 15 a day and on Rs 20 per day in urban areas.

In terms of average per capita daily expenditure, it comes out to be about Rs 35 in rural and Rs 66 in urban India. Approximately 60 per cent of the population lives with these expenditures or less in rural and urban areas.

July 2009–June 2010 Situation

According to NSS carried out between July 2009 and June 2010, all India average monthly per capita consumer expenditure (MPCE) in rural areas was Rs 1,054 and urban areas Rs 1,984. The survey also pointed out that 10 per cent of the population at the lowest rung in rural areas lives on Rs 15 a day, while in urban areas the figure is only a shade better at Rs 20 day.

The report states that the poorest 10 per cent of India's rural population had an average MPCE of Rs 453. The poorest 10 per cent of the urban population had an average MPCE of Rs 599.

The NSSO survey also revealed that average MPCE in rural areas was lowest in Bihar and Chhattisgarh at around Rs 780 followed by Orissa and Jharkhand at Rs 820.

States’ Condition

Among other states, Kerala has the highest rural MPCE at 1,835 followed by Punjab and Haryana at Rs 1,649 and Rs 1,510 respectively. The highest urban MCPE was in Maharashtra at Rs 2,437 followed by Kerala at Rs 2,413 and Haryana at Rs 2,321. It was lowest in Bihar at Rs 1,238. The median level of MCPE was Rs 895 in rural and Rs 1,502 in urban India, indicating consumption level of majority of population.

According to the study, food was estimated to account about 57 per cent of the value of the average rural Indian household consumption during 2009-10 whereas it was 44 per cent in cities.

Planning Commission’s Estimates

Based on NSSO estimates, the Planning Commission had pegged that poverty line at Rs 28.65 and Rs 22.42 daily consumption in urban and rural areas respectively in 2009-10. As per the Commission’s estimates the number of persons living below poverty line was 35.46 crore in 2009-10, as compared to 40.72 crore in 2004-05.

Poverty Lines and BPL Population: State of HDI in India

The Planning Commission has recently released the latest poverty estimates for the country showing a decline in the incidence of poverty by 7.3 per cent over the past five years and stating that anyone with a daily consumption expenditure of Rs. 28.35 and Rs. 22.42 in urban and rural areas respectively is above the poverty line.
The new poverty estimates for 2011-12 will only add to the furore triggered by the Commission's affidavit in the Supreme Court in October in which the Below Poverty Line (BPL) cap was pegged at an expenditure of Rs. 32 and Rs. 26 by an individual in the urban and rural areas respectively at the going rate of inflation in 2010-11.
Eventually, Union Minister of Rural Development Jairam Ramesh and Planning Commission Montek Singh Ahluwalia jointly set aside the cap suggested by the Tendulkar Committee and set up a new committee to work out a new methodology for identifying the BPL households.
The present system had to be continued until a new one was worked out and that would be done only after the Socio-economic and Caste Census was completed.
Impact of Government Spending
Similarly, Planning Commission members Abhijit Sen and Mihir Shah separately underlined the need to adopt the same methodology to understand the impact of government spending on the people and across the States over a period of time.
The figure of expenditure in the Supreme Court affidavit had been arrived at by adjusting the figures for 2004-05 with the prevailing inflation rate in 2011-12 and not based on the survey conducted across the country. The survey for 2011-12 is likely to be completed by July and the report would be released in December.
Tendulkar Methodology
Government programs had been delinked from the poverty line estimated on the basis of the Tendulkar methodology which was only being used to understand the impact of government programs over a period of time.
The impact of the new list will be felt on the Rural Development Ministry schemes, particularly those availing various kinds of pension under the National Social Assistance Program.
As per the Household Consumer Expenditure Survey for 2009-10, 29.9 per cent of the population alone were under the BPL from 37.2 per cent in 2004-05.
Rural Poverty
Rural poverty has declined by eight percentage points, from 41.8 per cent to 33.8 per cent, and urban poverty by 4.8 per cent, from 25.7 per cent to 20.9 per cent.
At the national level, anyone earning Rs. 672.8 monthly that is earning Rs. 22.42 per day in the rural area and Rs. 859.6 monthly or Rs. 28.35 per day in the urban area is above the poverty line. Population as on March 1, 2010 has been used for estimating the number of persons below the poverty line.
The total number of people below the poverty line in the country is 35.46 crore as against 40.72 crore in 2004-05. In rural areas, the number has come down from 32.58 crore five years ago to 27.82 crore and the urban BPL number stands at 7.64 crore as against 8.14 crore five years ago.
One of the most astonishing revelations is that poverty has actually gone up in the north-eastern States of Assam, Meghalaya, Manipur, Mizoram and Nagaland.
Even big States such as Bihar, Chhattisgarh and Uttar Pradesh registered only a marginal decline in poverty ratio, particularly in the rural areas, whereas States such as Himachal Pradesh, Madhya Pradesh, Maharashtra, Odisha, Sikkim, Tamil Nadu, Karnataka and Uttarakhand saw about 10 per cent decline in poverty over the past years.
States with high incidence of poverty are Bihar at (53.5 per cent), Chhattisgarh (48.7 per cent), Manipur (47.1 per cent), Jharkhand (39.1), Assam (37.9 per cent) and Uttar Pradesh (37.7 per cent).
However, it is in poverty-ridden Odisha that monthly per head expenditure of just Rs. 567.1 and Rs. 736 in rural and urban areas respectively puts one above the poverty line, while in Nagaland, where the incidence of poverty has gone up, the per capita consumption expenditure of Rs. 1016.8 and Rs. 1147.6 in rural and urban areas puts one above the poverty level.
Among social groups in the rural areas, Scheduled Tribes (47.4 per cent) suffer the highest level of poverty, followed by Scheduled Castes (42.3 per cent), Other Backward Castes (31.9 per cent) as against. 33.8 per cent for all classes.
In rural Bihar and Chhattisgarh, nearly two-third of the SCs and the STs are poor where as in States like Manipur, Orissa and Uttar Pradesh it is more than 50 per cent.
In urban areas, 34.1 per cent of SCs, 30.4 of STs and 24.3 per cent OBCs fall under this category against 20.9 per cent for all classes.
Poverty Estimates
In September 2011, the Planning Commission has told the Supreme Court that the BPL population in the country is 40.74 crore and the poverty line for the urban and rural areas could be provisionally placed at Rs. 965 per capita per month (approximately Rs. 32 per day) and Rs. 781 per capita per month (around Rs. 26 per day), respectively.
The Planning Commission in an affidavit said that the BPL population at present touched by the public distribution services (PDS) was 35.98 crore.
The poverty estimates for year 2009-10 were being worked out and the provisional estimates suggest that the total BPL population as per 2009-10 estimation may be lower than that which would have emerged (on the basis) of Tendulkar ratio on 2004-05 projection.
The Planning Commission filed the affidavit in pursuance of the May 14 order of the apex court bench of Justice Dalveer Bhandari and Justice Deepak Verma, which said that according to the expert group headed by Suresh Tendulkar at the price level of 2011, it was impossible for an individual in urban and rural area to consume 2,100 calories in Rs. 20 and Rs. 15, respectively.
The bench's order asked the Planning Commission to 'revise norms of per capita amount looking at the price index of May 2011 or any subsequent dates'.
The affidavit stated that on applying price increase using the consumer price index for industrial workers in urban areas and the consumer price index for agricultural laborers for rural areas, 'the poverty line at June 2011 price level can be placed provisionally at Rs. 965 per capita per month in urban areas and Rs. 781 per capita per month in rural areas'.
The affidavit further stated: "At June 2011 price level, for a family of five, this provisional poverty line would amount to Rs. 4,824 per month in urban areas and Rs. 3,905 per month in rural areas."
The affidavit said that the final poverty line following the Tendulkar Committee ratio would only be available after completion of the 2011-12 National Sample Survey (NSS) and this would vary from state to state because of price differential.
Moderate Malnourishment
It is no secret that India is doing quite poorly on a number of development counts. According to the Human Development Report, India languishes at around 130th rank among of 177 countries. The International Food Policy Research Institute’s Global Hunger Index ranks India 94th among 118 countries surveyed. The World Food Program (WFP) estimates half of our children suffer from severe or moderate malnourishment.
Sixty-seven out of 1,000 children born in India die before the age of five. Despite a national policy for compulsory primary education, only 50 per cent of children have access to proper education.The World Bank’s own estimate of poverty in 2007 has been radically revised by new cost of living data which draws the new poverty line at $1.25 at 2005 purchasing power parity. On this basis a shocking 41.6 per cent of India’s population — or 456 million people — live below the poverty line, notes Raghav Gaiha, professor of Public Policy, University of Delhi. This is about one-third of the world’s poor population. Even this World Bank data is an underestimate because it does not adequately cover the rural areas where the vast majority of the poor live.
The Planning Commission has accepted the Tendulkar Committee report, which says that 37 per cent of people in India live below the poverty line. This arbitrary method based on an income of `32 per day for urban area and `26 for the rural, has been widely disputed. India wants to be globally respected as a world power but refuses to apply global standards of calculating poverty, which should at least be in line with the World Bank criterion of $1.25 per day.
There is an urgent need to agree on some objective criteria by which to ascertain the number of those in the BPL category. The multidimensional poverty indicators developed by the Oxford Poverty and Human Development Initiative and applied by the Human Development Index (HDI) 2010, are perhaps the most reliable measures developed so far. They include: years of schooling, child enrolment, mortality (any age), nutrition, electricity, sanitation, drinking water, flooring, cooking fuel, and asset ownership. Each of these indicators is given due weight. The new Inequality Index as deployed in the HDI further elaborates the nature of disparities and shocking poorness of the poor in relation to the richness of the rich.According to this calculation the proportion of BPL families in India is 55.4 per cent of the population. Bihar fares poorest, with 61.4 per cent of the people below the poverty line, while Kerala has the lowest fraction of BPL people — 40.9 per cent.
NREGS and Several Other Job-Creation Projects
The Planning Commission’s figures on reduction of poverty to 29.8 per cent in 2009-10 from 37.2 per cent in 2004-05 is welcome as it was expected, considering that it comes on the back of the government’s flagship National Rural Employment Guarantee Scheme (NREGS) and several other job-creation projects like the Pradhan Mantri Gram Sadak Yojna. Welcome as it is that 47 million people have been lifted from poverty, the sorry fact remains that 365 million people — one-third of our population — remain below the poverty line in a country that is growing fast.
These figures only reflect advances made in implementing the government’s “inclusive growth” policy. It clarified that in no way is it going to be a yardstick to cut down employment generation by the government. The Opposition’s fears might not be entirely unfounded: Finance Minister Pranab Mukherjee’s recent Union Budget lowered spending on NREGS from `40,000 crores (in the previous budget) to `33,000 crores as last year only `31,000 crores was spent out of the budgeted amount.Schemes like NREGS continue to be indispensable for creating employment and putting purchasing power in the hands of the rural poor across the country.

Bangladesh Government Faces Challenge in Controlling Prices of Commodities

The Bangladeshis are bearing the brunt of rise in the prices of essential commodities in the international market. The poor people of the country are passing their days in hardship in spite of various social safety net programs of the government. A consumer at this moment has to spent taka 110 (Tk) for commodities which he could purchase with Tk 100 in 2010 because of rise in inflation. Under this ground reality, Finance Minister Abul Maal Abdul Muhith is going to announce the budget of the coming fiscal year (2012-13).
Economists and market analysts are saying that controlling prices of the commodities will be the main challenge in the coming budget. The prices of essential commodities made a further high jump because of a recent rise in the prices of fuel oils and CNG, and an enhancement of transport fares as a sequel to this.

Tackling Inflation
The finance minister will announce budget in parliament on June. This will be the third budget of the present government. Debates have already begun on what good news a hopeful Abul Maal Abdul Muhith will give in the new budget or whether there will be any surprise there. All are in unison that inflation is a big enemy of the economy at this moment. The finance minister himself has admitted that inflation is the main problem. Economists have suggested the government to ensure social security, including enhancement of food supply, to gear up rural economy, increase investment, and reduce the impact of inflation.
It was reported that the finance minister will undertake efforts in gearing up social safety net programs in the new budget for controlling the inflation. All existing allowances, including elderly and widow grants, will be continued in the new budget. But proposals will be made to expand the areas of allowances instead of enhancing the amounts.
Honorarium of the freedom fighters will also be increased. A special emphasis will be given to keep the food supply normal. For this reason, plans have been undertaken to build an adequate stock of foods. A proposal will be made to construct new warehouses to increase the capacity of food stocking.
An announcement of recruiting 100,000 new employees in the public sector will also be made in the new budget. A proposal for making the highest allocation in the education will also be made in the budget. The new budget will continue all existing stipend programs for the students. Like in the past, the energy and power sector will be given the highest priority in the fiscal plan.
In fact, tackling the inflation will be the main challenge of the government in the coming budget. He thinks that the government has no adequate mechanism in its hands to contain the price hiking. The government can keep the food supply normal and gear up the social safety net programs.
Maintaining the growth and controlling the inflation will be the main challenge of the government in the next budget. Adopting a monetary policy with more contractions for controlling the inflation. But the principle objective of the next budget would be to increase investment and employment by keeping the inflation under control.
The areas of Value-Added Tax (VAT) and tax would be expanded in the coming budget to increase revenue from internal sources. But no big change will be made in the tax structure. Additional 500,000 taxpayers will be identified for the expansion of area of income tax. The people will be given some sorts of relief from tax burden. In this regard, a proposal will be made to fix the tax-free income at Tk 180,000 for individual by rebating Tk 15,000. But minimum income tax rate at Tk 2,000 will remain intact in the budget.
For discouraging smoking, prices of cigarettes will be increased. A proposal will be made in the budget to restructure duties in car import to stop tax evasion. Facilities of tax rebate will be reduced to increase collection. There will be a proposal for expanding the tax net up to the upazila (subdistrict)-level. An announcement will be made in the new budget for paying VAT rate equally by all small and big traders for abolishing rebate facilities against value addition tax of VAT goods and service sector.
The highest 25 percent tax will be maintained for protecting the interest of the local industries, whereas a proposal will be made for continuing one more year the regulatory duties on all imported finished goods. An announcement will be made in the budget to increase the tenure of bond license from the existing one year to two years for the convenience of the entrepreneurs. A provision will be made for duty-free import of necessary equipment for building solar power plants for generating alternative energy to face electricity crisis. An announcement will be made for enhancing more two years the preshipment inspection system. The interest on savings certificate will be increased.
The new budget will make a set of reform proposals in the income tax sector. A proposal has been made in the next budget to realize an additional tax of Tk 55billion through increasing the tax net and taking various reforms and administrative measures. An announcement will be made to set up 100 taxpayer centers across the country to reach the income tax service at the doorsteps of the common man. Provisions will be made so that the taxpayers can submit their return online.
At present, Tk 0.40 (0.4 percent) is realized as source tax on the export earning of the garment sector. In the coming budget the source tax might be imposed on all the export oriented sectors other than garments. At present the eligible persons have been brought under the income tax net only in the urban areas. A proposal will be made to expand the tax net up to the upazila-level. The new budget will made an announcement on introducing Alternative Dispute Resolution (ADR) to settle litigations quickly for increasing revenue earning. Massive reform programs will be undertaken to make the National Board of Revenue (NBR) a powerful organization. The laws will be announced to make the VAT rules more simplified.
Prices of Essential Commodities

The inflation in March was at 10.49 percent on a point-to-point basis. This rate of the inflation is the highest after 2008. The people of fixed income group suffer the maximum because of any rise in the inflation. The negative impact of the inflation is that it does not increase the income at a rate the commodity prices make the jump. And as a result, the poor people lose their purchasing capacity.
The cause of concern at the high trend of inflation is that most of the people in our country live below the poverty level. This creates some sorts of unrest in the economy. At present the rate of inflation surpassed the double-digit mark. It has become a very difficult task for the common people to meet the cost of living amid the continuous rise in the inflation.
ADP: A proposal for a huge Annual Development Program (ADP) will be made in the coming budget for increasing investment in the public sector. The possible size of the ADP might between Tk 465 billion and Tk 470 billion. The resources committee has recommended for an ADP of Tk 460 billion. Prior to her foreign visits, the prime minister issued instructions to allocate more fund for the ADP. The Planning Commission has finalized the draft of the new ADP. The National Economic Council (NEC) will approve the ADP at the end of May following return of the prime minister from abroad.
A proposal has been made for allocating Tk 273.170 billion for the new ADP from internal resources increasing the domestic share in the program. The rest of the ADP fund will come from foreign assistance. There will be 1,013 projects in the proposed ADP. Of those, the number of new projects will be over 200. Most of these projects are under the ministries of local government and communications. Many people believe that these projects are worthless and those being taken in political consideration.
The Planning Commission said that a demand for Tk 620 billion has come from different ministries in the new ADP. It has been learnt that the proposal for maximum allocation in the newly proposed ADP is made for the electricity sector. The proposed allocation for the power sector in the new ADP is about taka 72 billion, which is 44 percent higher than that of the current fiscal year (2011-12). The allocation for the power sector in the current fiscal is Tk 50.170 billion. A proposal has been made for allocating Tk 11.140 billion for the energy sector which was Tk 10 billion in the current fiscal.
The Local Government Division has made a proposal for allocating Tk 95.550 billion in the new ADP for the development of rural infrastructures. In addition, proposals for allocating Tk 35.120 billion for primary mass education and Tk 21.430 billion for education ministry have been made in the new ADP. The implementation rate of the ADP still April was 60 percent.
Subsidy: Subsidies will be continued in the coming budget. A proposal has been made to allocate Tk 250 billion for the purpose. The maximum of the subsidy is given to the power and energy sectors. A sum of Tk 120 billion will be allocated for the power and energy sector. The rest of the subsidy money will go to agriculture, food, and social safety net programs and export sector. A big chunk of the budget money is spent for subsidy. At present the allocation in the subsidy sector is about 9 percent of the total budget. In the current fiscal year, Tk 170 billion was allocated as subsidies for different sectors. The amount in the revised budget increased to Tk 200 billion. Most of the subsidy money was spent in the energy sector as the prices of fuel oil increased in the international market. In this regard, economist and researcher Dr Hasan Mansur said that budget deficit would increase if the amount of subsidies rises. And this would leave a negative impact on the inflation, he added.
Size of Budget: The government is going to announce a big-volume budget in the coming fiscal year to boost investment. The outlay of the new budget could be at Tk 1,630 billion. Of this, revenue budget is Tk 117 0billion and development budget Tk 470 billion. The Gross Domestic Product (GDP) target in the new budget might be fixed at 6.9 percent or 7 percent. The budget deficit has been fixed at 5 percent.

Success in Space and Poverty on Earth

The Indian Space Research Organization (ISRO) crossed another milestone in space research. Its Polar Satellite Launch Vehicle (PSLV) set two satellites into space on 20 April. With this, Indian scientists, since the country's independence, have achieved great success in space exploration apart from other achievements. But there remains one field where it has failed dismally and that is removing poverty in the country. All countries that have failed in this most important field, their other achievements have come to naught and become meaningless.
In the eyes of the world, India is a rapidly growing economic power. Planning Commission chairman Montek Singh Ahluwalia is in nobody's doubt. Prime Minister Manmohan Singh, who appointed him to the post, also points out that there is no shortage of his capabilities. He has always been praised. But now the Supreme Court has raised objection to his policy, and it cannot be considered inappropriate.
Hiding Real Picture
Ahluwalia tried to remove the stain of poverty by hiding the truth which was often laid at India's door. He considered those earning Rs.13 per day income in rural areas to be living above poverty line. This was his attempt to remove the stigma of poverty. To do this, he shelved the UN criteria for assessing poverty. His announcement helped in getting down the difficulties of the union government because, according to this standard, below the poverty line is reduced to 36 percent.
The Supreme Court, however, did not think much of Ahluwalia's attempt of reducing poverty and the court could not resist asking him what was behind his scheme which is reducing hundreds of thousands of people in this country to dire poverty. Then what is the meaning of hiding this truth and painting a rosy picture of the country? Instead, what the government should have done is to wipe out the black mark of poverty from the face of the country. Such rhetoric is not going to benefit any.
It seems strange that Ahluwalia had to listen to the truth from the Supreme Court. No benefit is going to come by doing gymnastic with figures and the Supreme Court ultimately ask Ahluwalia what was the reason for such optimistic predictions when the country is going through such a phase. What is the hidden reason for such optimistic predictions? It is a pity that Ahluwalia had to listen to such talk from the court. In the past also, he has been against the growing subsidies to farmers. What seems appropriate is that he seems more interested in eliminating farmers than poverty and fulfilling the basic needs of people. This is not the first time that the Supreme Court has raised its voice against poverty. It has raised its voice several times. Before this, the Supreme Court insisted that the rapidly rotting grain should be distributed free among people.
Antipoverty Programs
What happens is that the government has seriously thought about its policies but has not as seriously implemented them. Because of corruption the money that is allotted has not reached its rightful targets. Prime Minister Manmohan Singh has acknowledged this failure himself that corruption is a very big challenge and a hindrance to progress.
Poor states have benefited from the antipoverty programs but what to do about the money that gets siphoned off on the way. There seems to be no care about it. When high officials themselves siphon off large amounts then what is the government going to do with the empty treasury.
Shortage of Food Grain
It is strange that there is no shortage of food grain in the country but still people are starving. Many states have informed the union government that there is no shortage of grain and have requested it to distribute it properly. The real reason is poor distribution. Increase in poverty is causing brigandage. Indians are out on the streets looking for employment. The court remarks are enough to remind the public. Our policies should be made on the basis of humanity. There is no denying that owing to wrong policies the poor are getting poorer and the country is facing t he challenge of poverty. All talk of progress sounds hollow.