Home » Budget 2001 - 02 » Union Budget 2001-02 » Finance Minister Speech : Journalists Welfare Fund

Finance Minister's Speech - Part A (contd...)

Journalists Welfare Fund

74. Journalists have to increasingly take greater risks in covering terrorist and other violence prone incidents. As an acknowledgement of their services and sacrifices, and with the expectation of a better treatment at their hands, I propose to set up a Journalists Welfare Fund with a contribution of Rs 1 crore under the grants of Ministry of I&B. My colleague the I&B Minister will announce the details of the scheme.

Entertainment

75. Our entertainment industry, particularly the film industry not only provides the much needed fantasy to millions of our people who live in an otherwise harsh and cruel world, it has also emerged as an important segment of our economy and holds great promise for the future. Two years ago, I provided for this industry the same tax exemption that was available for merchandise exports. A few months ago, the Government issued a notification under the IDBI Act whereby entertainment industry including films has been declared as an industrial concern. Banks are in the process of finalising guidelines for financing such projects that are bankable. I hope that the film industry will take full advantage of these measures to bring about a greater degree of professionalism and transparency in its operations, and will not do things chupke chupke and certainly not chori chori.

Fiscal Consolidation

76. As I have already stated the most serious problem confronting the economy is the poor state of the fiscal health of both the Central and State Governments. The combined fiscal deficit of the two together is in the region of 10 per cent of GDP. I have often been described as a fiscal fundamentalist. Some have gone to the extent of calling me a fiscal terrorist. Why am I so concerned about the fiscal deficit? Let me try to explain. The total receipts of the Central Government in the current year according to BE are about Rs 281,000 crore. Of this amount, Rs 72,000 crore is States’ share of the Central taxes and grants. The Central Government is, therefore, left with Rs 209,000 crore. On the expenditure side, about Rs 101,000 crore was to be spent on interest, Rs 59,000 crore on defence, Rs 23,000 crore on major subsidies and Rs 16,000 crore on pensions. The net amount left for meeting all other Government expenditure totalling Rs 123,000 crore was, therefore, only Rs 12,000 crore. I have, therefore, to borrow Rs 111,000 crore in the current year to make both ends meet. The most worrisome aspect is that over 70 per cent of my borrowing, i.e., Rs 77,000 crore was for financing unproductive revenue expenditure. This will add to my interest burden next year forcing me to borrow more and ultimately fall into a debt trap. I am deeply conscious of the burden which is being placed on future generations, by our extravagance. I cannot allow this situation to continue.

77. As promised in my earlier Budget Speeches, I appointed the Expenditure Reforms Commission last year and introduced the Fiscal Responsibility Bill in this House in the last session. The bill seeks to reduce the fiscal deficit to 2 per cent and completely eliminate the revenue deficit over the next five years.

78. A number of initiatives have already been taken to contain, in particular, the growth of non-plan expenditure. I have not allowed any increase in non-plan expenditure this year. Consequently, for the first time in many years, the fiscal deficit target fixed in the budget has indeed been achieved, and remains at 5.1 per cent in the RE of the current year. The target of 3.6 per cent revenue deficit has also been achieved.