The announcement to raise the allocation under the MPLADS, a scheme under which MPs are provided funds to undertake development activities, was welcomed by the members cutting across party line.
MPs have been demanding an increase in the MPLADS funds to enable them to take up worthwhile developmental activities in their constituencies. They have been demanding either to raise the allocation or else to scrap the scheme.
“We have considered the matter and I am happy to announce an increase in allocation under the Scheme from Rs 2 crore to Rs 5 crore. This will result in additional allocation of Rs 2,370 crore per year”, Mukherjee said on Friday.
Although the government obtained the approval of the Election Commission before announcing the scheme, the Minister said, MPs will not be able to utilise the enhanced allocation or make commitments till the ongoing elections in the five states (Assam, West Bengal, Tamil Nadu, Puducherry and Kerala) are completed.
The Minister, while winding up general discussions on the Budget in the Lok Sabha, also announced incentives for investment in education and health sectors. There will be no vote-on-account this year as Parliament proposes to complete the whole budgetary exercise within the current fiscal itself.
He extended the interest subsidy scheme for fish farmers and fishermen benefiting 20 lakh persons engaged in the activity.
As regards the other demands relating to tax proposals including withdrawal of service tax on healthcare sector, Mukherjee said, “these are under examination”.
The minister said he shall respond to these issues while replying to the discussion on the Finance Bill, 2011, later during the session. The Lok Sabha later passed the supplementary demands for 2010-11 and relevant appropriation bills, completing the first phase of the three-stage budgetary exercise.
Referring to the issue of rising food prices, Mukherjee took some comfort from the fact that food inflation rise came down from over 20 percent in February 2010 to around 9 percent.
“It is unacceptable. This figure is equally unacceptable”, the Minister said, adding the government was making efforts to increase supply to tame rising price of essential food items.
On black money, Mukherjee said, the government was revising the Double Taxation Avoidance Agreement (DTAA) with several countries and signing Tax Information Exchange Agreements (TIEAs) with tax havens.
Mukherjee said that the government has signed the revised DTAA with Switzerland that would help the country to get banking information beginning 1st April 2011.
“We have to proceed within the framework of law. We cannot bypass that”, he added. On the issue of futures trading in commodities, Mukherjee said, the farmer organisations are against banning it.
The framers want to take advantage of the prices prevailing in domestic and international market, he said, adding, “We have to strike a balance between the interest of producers and consumers”. Mukherjee said the high inflationary pressure, specially in food and some non-food articles, existed in other emerging economies also. “I am not making any plea. This is not an excuse that because there is inflation in other areas there should be inflation in India also. It is not.
“But the fact of the matter is inflationary pressure is visible all over the world. It is not merely in our country,” he said. Referring to announcements for the education and health sectors, Mukherjee said, the initiatives were aimed at accelerating investments in those sectors. “There is a need to further accelerate the creation of infrastructure in this (health and education) domain. I am happy to announce that henceforth capital stock in educational institutions and hospitals will be treated as infrastructure sub-sectors,” he added.
Capital investment for these sub-sectors will be eligible for the Viability Gap Funding Scheme of the Ministry of Finance, he said, adding that detailed guidelines would be announced soon.