New Delhi,  Feb. 27: The finance minister, Mr Pranab Mukherjee, in the thick of things on Budget day, took time off on Saturday to tell Financial Chronicle in a wide-ranging interview that he wants to boost the agriculture sector. “It is closely linked to our food security and closely linked to employment generation. It is also closely linked to our rural development,” he said.

New Delhi, Feb. 27: Moves are afoot for a meeting between superstar Shah Rukh Khan and the Shiv Sena heavyweights, including Balasaheb Thackeray and his son Uddhav. Both camps are in the mood to “forget” and “get past” events that had somewhat marred

Riyadh, Feb. 27: The government of Saudi Arabia broke with tradition on Saturday when Prime Minister Manmohan Singh landed in Riyadh to a red carpet welcome. To greet him at King Khalid International airport were three of Saudi King Abdullah’s half-brothers,

Chandigarh,  Feb. 27: Thousands of armed Dera Sacha Sauda men, apparently provoked by the registration of a fresh murder case against their spiritual guru, Gurmeet Ram Rahim Singh, went on the rampage on Saturday evening, setting fire to railway property and dozens of buses across several towns in south-western Punjab and western Haryana.

Ahmedabad/Panaji, Feb. 27: Adani Enterprises managing director Rajesh Adani was arrested by the CBI on Saturday morning in connection with alleged customs duty evasion, a move that sent shockwaves through India’s business community. The Gujarat high

New Delhi, Feb. 27: The Centre is formulating a new “refugee law” to deal with the influx of refugees in the country and related security and human rights concerns. The Union home ministry has put on fast track the long-pending demand for a national legislation — the first of its kind — to bring about uniformity in the government’s approach while dealing with refugees and asylum-seekers.

Afghan security forces climb a ladder to storm the Park Regency guest house to fight suicide attackers in Kabul’s Shar-e-Naw area on Friday. PHOTO: AFP

New Delhi, Feb. 26: It was a tightrope walk for finance minister Pranab Mukherjee. He had to raise money and yet give growth a leg up. In his Budget for 2010-11 presented on Friday, he did that by partially rolling back the stimulus package, imparting a welcome degree of moderation to taxation, allocating funds to the right sectors, unfolding a scenario where government borrowings would be lowered to 5.5 per cent of GDP and, finally, creating an environment to reach 8.5 per cent economic growth. But in doing all that, he also risked higher inflation.
There were no big-bang announcements, and the focus remained firmly on fiscal consolidation and growth. All this will mean Rs 20,500 crores more by way of new or withdrawn taxes. For taxpayers, companies, exporters and markets, it was win some and lose some. Nothing underlined this more than the shuffling of the tax structure.
The changes gave a lot but also took away substantially. Increases in duties on crude and petroleum products brought about an immediate increase in the prices of petrol and diesel, resulting in Independent’s India’s first Opposition walkout as the Budget speech was being read out.
Mr Mukherjee raised tax exemption limits and reduced the surcharge to 7.5 per cent from 10 per cent for companies. For individuals, the exemption limit remains unchanged at Rs 1.6 lakh. Beyond that, the slabs have been redefined. Thus, those with income up to Rs 5 lakhs a year will pay 10 per cent tax; incomes between Rs 5 lakhs and Rs 8 lakhs will attract 20 per cent; and for incomes higher than that, the rate is 30 per cent. For women and senior citizens, the exemption limits remain unchanged. These reliefs amount to Rs 26,000 crores.
The minister more than makes up the income-tax sacrifice by mobilising Rs 46,500 crores more in indirect taxes. This will come from a two per cent increase in excise duty, an increase in petroleum, customs and excise, a hike in minimum alternate tax (MAT) from 15 per cent to 18 per cent, and from eight more services that have been brought under the service tax net.
Petroleum companies lost no time in announcing a Rs 2.71 a litre increase in petrol prices and a Rs 2.55 per litre hike in diesel. Consumers’ burden, as a result, will increase by Rs 6,000 crores over the year.
Companies will save Rs 5,000 crores due to the lowering of the tax surcharge. But the increase in the MAT rate will mean an additional corporate outgo of Rs 6,000 crores.
In the service tax net are added brand ambassadors, film copyrights, sound recording, health checkups provided to company employees, medical record maintenance, electricity exchanges, organisers of lotteries and games. Though the rate stays at 10 per cent, the new additions will mean Rs 3,000 crores more in the government’s kitty.
In the attempt to clean up the government’s balance sheet, however, the plot was perhaps lost somewhere in terms of the war on inflation. Mr Mukherjee himself admitted that inflation, particularly in food, was still a major concern. But Dr Kaushik Basu, chief economic adviser, thought inflation would go up by only 0.448 per cent. “It is only a blip; it will balance out in the long term,” he said.
As for reforms, two key moves — the goods and services tax and the direct tax code — will have to wait for one more year, as consultations with states and political parties will have to take place first. These can now be expected only on April 1, 2011.
On other reforms, one feeble statement has been made, hinting at the likely opening up of the retail trade to domestic and foreign companies. This has come in the context of inducing competition at the retail level to tame prices of essential commodities. The Budget also unveils a four-pronged strategy to expand agriculture productivity, reduce wastage, enhance farm credit and thrust to food processing sector.
If any decision can be called a bold reform measure, it has to be the announcement of aggressive disinvestments and equity sale in profitable government companies, which, Mr Mukherjee hopes, will raise Rs 40,000 crores. Another revenue stream, 3G auctions, will bring in Rs 35,000 crores.
There were hardly any new proposals for infrastructure, rural or urban. The minister only announced large allocations and fine-tuning of the implementation of flagship schemes like Bharat Nirman and the rural employment guarantee programme. The focus on education, health and food security, however, remains intact.
A new element has been introduced to the development agenda. It is the rollout of a package of incentives and work plans to promote environment-friendly technologies and projects, and intertwine them with energy ventures.
On the macro-economic front, Mr Mukherjee has toed the line prescribed by the 13th Finance Commission for consolidation and fiscal correction. The measures include phasing out the revenue deficit, reducing the fiscal deficit and moving towards double-digit growth in the economy. But that is more a statement of intent than a concrete plan of action.

K.A. Badarinath

New Delhi, Feb. 26: The Opposition’s move to join hands and draw in the Samajwadis, BSP and RJD on the floor of the Lok Sabha on Friday rang alarm bells in the Congress-led UPA.
In an unprecedented move, a united Opposition, joined by the SP, BSP and RJD, walked out and boycotted the Budget after Union finance minister Pranab Mukherjee announced the hike in Central excise duty on petroleum products. As per the present arithmetic, the coming together of  the SP, BSP and RJD against the Centre might just threaten the stability of UPA-II. The combined strength of the SP, BSP and RJD in the Lok Sabha is 47.
The UPA’s combined strength in Lok Sabha is reportedly 276, just four more than the magic figure of 272 MPs. With the three regional outfits supporting the government from outside, the combined strength of UPA-II comes to 323. Therefore, any move to withdraw support by these three regional players could somewhat disturb the government. While the SP has 22 members in the Lok Sabha, the BSP’s strength in 21 while the RJD has four members.
That the somewhat dampening impact of the fuel price hike was being taken seriously by the government was apparent when Prime Minister Manmohan Singh announced that the economy was strong enough to absorb the hike. He defended Mr Mukherjee’s proposal to hike the basic duty on crude and petroleum products and said, “The economy has the capacity to absorb this order of adjustments in excise duties and customs duties without generating a wholesale inflationary spiral.”
Apart from the Opposition’s fury, there were also rumblings at the decision within the Congress. Some felt the move could have been delayed since it could send negative signals for the forthcoming Assembly polls in West Bengal, Uttar Pradesh and Bihar. “At this crucial juncture this decision should be kept on hold,” Trinamul Congress chief whip in the Lok Sabha Sudip Bandopadhyay told the media. The Trinamul, an ally of the UPA, feels the decision may have an adverse impact in the Bengal polls. Similarly, RJD chief Lalu Prasad Yadav and BSP leaders wanted to distance their outfits from the decision.
Leading the Opposition charge, the BJP is planning to bring cut motions and oppose provisions under the Union Budget to censure the government for its “anti- people” policies. Officially, Congress leaders attacked the BJP for leading the walkout. Parliamentary affairs minister Pawan Kumar Bansal and his Cabinet colleagues Anand Sharma and Salman Khurshid disapproved of this “unparliamentary” behaviour.
Leader of the Opposition in the Lok Sabha Sushma Swaraj strongly defended the walkout. She said, “This is a move that will lead to a rise in the prices of diesel and petrol and hit the common man, who is already burdened by price-rise.”
It is felt that if the Opposition and “supporting” parties remain united, the government could find it difficult to push through some of its Budget proposals.

Venkatesh Kesari

New Delhi/Kabul, Feb. 26: A four-hour-long terrorist strike in central Kabul which began at 6.35 on Friday morning, in which an indeterminate number of Indians and possibly six others, including an Italian diplomat, a French filmmaker and local policemen, were killed, began with the attackers blasting through the entrance of the Safi Landmark Hotel, a leading establishment, and climbing to the sixth and seventh floors looking for Indian residents, Afghan sources pointed out to this newspaper.
Late at night the Indian embassy in Kabul confirmed six fatalities. (The Afghan interior ministry had earlier indicated that nine Indians might be among the dead.) These are Maj. (Dr) Laishram Jyotin Singh of the Army Medical Corps, attached to Kabul’s famous Indira Gandhi Hospital; Maj. Deepak Yadav of the Army Education Corps, who had been despatched to teach English at the local military academy; Roshan Lal, an ITBP jawan posted at the Indian consulate in Herat who was on leave, on his way back home; Nitin Chibber, a secretary at the Indian consulate in Kandahar; engineer Bhola Ram, a project director of the Powergrid Corporation; and Nawab Khan, a tabla player visiting Kabul as part of a three-member troupe sent by the Indian Council for Cultural Relations.
The process of determining the identities of the dead and the injured is said to be continuing.
A Boeing 737 of the Indian Air Force communication squadron is being flown to Kabul on Saturday morning to bring back the deceased and the dozen or so Indians thought to be injured in the terrorist strike. There are several Indian Army officers among the injured as well, sources said.
Sources in the Afghan capital said details of the terrorist attack remained sketchy through the day, with the authorities keeping a tight control on news.
Rooms at the Park Regency and Noor, two guest houses adjacent to the Safi Landmark, which is part of the Kabul City Centre, a large modern shopping complex, had been taken up by the Indian government to house some of its personnel and visitors. The Army officers were at the Noor. After the coordinated attacks at the hotel and the two guest houses, external affairs minister S.M. Krishna said in a statement in New Delhi that this was the “third attack on Indian officials and interests in Afghanistan in the past 20 months”.
This is the nearest India has come to officially acknowledging on Friday that Indians were especially targeted in the dawn attack for which the Taliban has claimed responsibility.
In the earlier two attacks — both on the Indian embassy in Kabul, in July 2008 and October 2009 — Afghan and Indian officials, relying partly on American sources, pointed a finger at Pakistan without losing much time. On Friday, however, the Indians and the Afghans appeared to be observing restraint.
When the Afghan foreign minister Zalmay Rassoul telephoned Mr Krishna to commiserate on Friday evening, the Indian release quoted Mr Rassoul as saying that “India and Afghanistan were facing a common enemy”. Strongly condemning the attack, Mr Krishna responded that India firmly stood by Afghanistan “in confronting their common enemy”.
The reference to Pakistan is clear enough, but it is general in nature and does not link Islamabad, or more specifically the Inter-Services Intelligence, which has been blamed in the past, to the Friday attacks. Possibly this is because the sites targeted were a hotel and guest houses not exclusively occupied by Indians, although the two guest houses had predominantly Indian guests.
With security becoming tighter at the Indian embassy in Kabul, terrorists appear to be scouting for softer targets to get at Indians whose presence in Afghanistan is viewed with irritation by Pakistan. On December 15 last year, there was an attack just outside the Heetal Hotel in the posh Wazir Akbar Khan district of Kabul. Indian engineers were living at a guest house close to the hotel but happened to be away at the time of the strike, highly-placed Indian sources said afterward.
Prime Minsiter Manmohan Singh, President Hamid Karzai, British Prime Minister Gordon Brown, and Nato chief Anders Fogh Rasmussen condemned the dawn attack in strong terms.
In his statement, the external affairs minister said the Kabul attack “was the handiwork of those who are desperate to undermine the friendship between India and Afghanistan, and do not wish to see a strong, democratic and pluralistic Afghanistan”.
“The scourge of terrorism must be resolutely opposed, resisted and overcome through undiluted commitment and effort by the international community”, Mr Krishna added.
In Kabul, Taliban attacks are often timed to hurt office-goers at around 8 in the morning. The attack on Friday, at dawn, and at locations that house Indians in large numbers, is seen as a significant pointer by many in Kabul, Afghan sources observed.

Anand K. Sahay        
With agency inputs