Left Front discovers responsibility State accepts fiscal regimen | |
| OUR SPECIAL CORRESPONDENT | |
Calcutta, March 22: Buddhadeb Bhattacharjee's government has tied Bengal to a tight financial diet for the next five years that Mamata Banerjee would inherit if she won the Assembly polls next year. In the budget presented today, finance minister Asim Dasgupta committed the state to enacting a fiscal responsibility act next year after resisting it for several years, succumbing to the pressure of cleaning up its loan-laden books. If a state agrees to follow targeted financial discipline, the Centre offers in return loan relief that lowers the interest burden. In Bengal's case, in the revised estimates for 2008-09, interest payments form 97 per cent of the revenue deficit — the gap between revenue expenditure, which doesn't create capital assets, and revenue receipts, or tax and non-tax revenue. Bengal's decision to follow fiscal discipline translates into a benefit of Rs 1,400 crore in 2010-11 alone when the phased reduction of deficits will start. "This benefit will keep on increasing in the following years," the finance minister said. In exchange for fiscal tightening, the state receives debt waiver, loan restructuring and interest relief. If a commitment to fiscal responsibility is not in place, state-specific interest-free grants from the Centre become interest-bearing loans. Once a state enacts what is known as an FRBM (fiscal responsibility and budget management) Act, it gets interest relief in proportion to the amount by which it reduces its revenue deficit every year. Dasgupta promised to cut the revenue deficit to zero in 2014-15 from 5.6 per cent in 2009-10. Simultaneously, the fiscal deficit has to be shrunk to 3 per cent by then from 6.7 per cent in the current year. The fiscal deficit is the borrowing the government does to meet the gap between income and expenditure. The Left Front government's commitment to cutting the deficits sharply in five years raises a tantalising political prospect. Given that the Assembly elections are due in just over a year and the possibility that the CPM-led combine faces a serious threat of defeat, it might fall to Mamata to fulfil the commitment Bhattacharjee is making today. It's not as if an agreement to achieve deficit-reduction targets is sacrosanct. The Union government itself has shown scant respect for its own similar commitments. Mamata, not known as a fiscal fundamentalist, could well cite that as an escape hatch. Better still, she could ignore it completely as a Left conspiracy. The Front, on the contrary, if it returns to power, would be expected to keep its promise. Bengal and Sikkim were the only states to have so far refused to commit to deficit reduction. Their argument, as expressed by Dasgupta, was that it would shrink the government's welfare-enhancing role. The minister cited as reason for the change of mind the buoyancy in state revenue after the introduction of an "improved VAT (value-added tax) system" and another expected boost in 2011-12 when GST, or goods and services tax, is scheduled for debut. He explained later that the state had resisted for the past six years also because borrowings from the National Small Savings Fund (NSSF), 75 per cent of all central loans to Bengal, were denied the benefit of loan waiver. "The 13th Finance Commission has recommended the inclusion of borrowings from NSSF under the debt relief scheme," he said. NSSF loans will carry 8 per cent interest instead of 9.5 per cent, as recommended by the commission, now that Bengal has agreed to fiscal responsibility. |
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Strum away the blues, no strings attached | ||
| ANINDYA SENGUPTA | ||
Calcutta, March 23: Welcome to Asim Dasgupta's Sonar — as in sound waves — Bangla where you can listen to Bach after lunch, Beethoven in the evening and Tchaikovsky when depressed. The finance minister, known to pick a Mozart when in the mood, today struck a chord with musicians and music makers with something as non-sonorous as the state budget. Dasgupta waived the four per cent value-added tax on "musical strings", with one eye "on the needs of small traders and businessmen" and another on his singer wife. "I cannot sing but my wife (Shyamali) is a classical Rabindrasangeet singer and she sings well. I'm sure she will be happy on learning of this proposal," Dasgupta told The Telegraph over the phone, on returning to his Salt Lake home after a long budget day. (No, there wasn't Tchaikovsky playing in the background, although earlier in the day the Opposition had cried itself hoarse in the Assembly.) "I am very fond of western classical music and listen to it regularly," Dasgupta added. "Music is a great healer. After lunch, you should listen to Bach. In the evenings, one should go for Beethoven. And if you are depressed, try listening to Tchaikovsky. I am very fond of their creations." So was it his love for these composers or his admiration for his wife's vocal chords that had prompted the finance minister to spare a thought for musical strings in his budget? "I think as finance minister I have the responsibility of addressing the needs of small traders and businessmen. Particularly when anything related to music is concerned. In the last budget, I had given a tax exemption to musical instruments." This year, it was the turn of musical strings. "This is a good move that is sure to boost our business," said Tapan Sen, younger son of the late Hemen Chandra Sen, founder of the now-legendary Hemen & Co. on Rashbehari Avenue. Sen's sarods for the masters like Amjad Ali Khan are made of the finest Burma teak and use strings from German makers Roslau. The cost of the sarod is around Rs 60,000 and that of the string about Rs 600. The slash is not substantial, but sends out a positive signal, feel makers of the sarod and guitar alike. Peter Remedios, the chairman of the 101-year-old J. Reynolds & Co. on Mirza Ghalib Street, said that in a meeting earlier this year, the proposal to bring down the VAT on all musical instruments was placed before state representatives. Singer Durga Jasraj and sitar player Purbayan Chatterjee were among the artistes present at the meeting, convened by the Associated Chamber of Commerce and Industry, or Assocham, which acts as an umbrella body for professionals in the music industry, from artistes to instrument makers. "A lot of younger musicians struggling to buy proper instruments will also benefit from this," said Purbayan. Amyt Datta, guitarist with the bands Pink Noise and Skinny Alley, agreed: "A small gesture like this could eventually mean a lot." | ||
| WITH INPUTS FROM ARKA DAS AND MOHUA DAS |
MP Soren faces Assembly heat - JVM pins CM on bypoll dithering | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AMIT GUPTA & GAUTAM SARKAR | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ranchi/Dumka, March 22: The Tamar debacle came back to haunt Shibu Soren today with the Opposition cornering him on his apparent dithering over facing the electorate once again to become a member of the state Assembly to continue as chief minister. It's more than three months since Soren won the Dumka parliamentary seat, but the chief minister has not shown any urgency to become a member of the Assembly — he is obliged to become one within six months of assuming office — prompting speculation that he may hand over reins of the government to his son, Hemant, and opening himself up for attack from the Opposition. If JVM party leader in the Assembly Pradeep Kumar Yadav raised the issue during Question Hour, his boss, Babulal Marandi, took on Soren in Dumka today, saying that the chief minister was too scared to face elections after his humiliation in Tamar in January 2009 when he lost to Raja Peter, a Robin Hood-like local hero, leading to president's rule in Jharkhand. "Speculation is rife in the corridors of power that Soren would contest either from Jama or Jamtara, but I am quite sure he will not be able to win from anywhere in Jharkhand," Marandi said. The JVM chief, in Dumka to preside over a party meet, alleged Soren wouldn't contest a by-election out of fear and hand over his chair to his son, Hemant, who gave up his Rajya Sabha seat after becoming JMM MLA from Dumka. "It will be a mockery of democracy if Soren hands over his chair to his son," he added. In the Assembly, Yadav reminded Soren about the constitutional obligation of a chief minister to become an MLA within six months of assuming office. "The chief minister is yet to resign as an MP. Norms suggest he needs to become an MLA within six months. Last time (in 2008-2009) he remained at the helm of affairs without being elected legislator," Yadav said. Cornered, Soren replied in a hushed tone that he was thinking about it seriously and would take a final decision soon. But Yadav pressed ahead, talking about an "ulterior motive" being discussed in political circles that he would pass on the baton to his son, Hemant. BJP leader and deputy chief minister Raghubar Das tried to intervene by insisting that such matters should not be raised during Question Hour. But Yadav maintained that Guruji's indecisiveness was sending a wrong message to the people. "Moreover, his move was going against the spirit of the Constitution," he said, citing the case of S.R.Choudhary and the state of Punjab, in which the Supreme Court passed strictures against him for making a mockery of Section 164 (4) of the Constitution for becoming a minister for a second term without becoming an MLA. In Dumka, Marandi lambasted the Soren government for its failure on all fronts. "Bhay, bhook and bhrastrachar (fear, hunger and corruption) have became common phenomenon and the government has failed to counter it. Also, the governmnet has failed to curb Naxalites and the common mass is suffering," he said.
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ET SlideShow
| Broke or bust | ||||||||||||||||||||||||||||||||||||||||||
| Nearly two years after a general election, Bhutan's experiment with democracy is in trouble. Its two political parties face disqualification for defaulting on bank loan repayments and membership is sharply down. Debaashis Bhattacharya on the mess in the Dragon Kingdom | ||||||||||||||||||||||||||||||||||||||||||
Tshering Tobgay's eagle eye doesn't miss much. And his sharp tongue spares no one. When the Bhutan Opposition leader is not holding forth in the country's first elected Parliament, he is taking the government to task for lapses on his blog that he painstakingly updates every day. He has reason to. The 44-year-old mechanical engineer from the University of Pittsburg in the United States gave up his job as a bureaucrat in Bhutan to join politics in 2007. The problem is that he could, in the not too distant future, lose his job as a politician in his own country. For Bhutan seems to be careening uncontrolled towards a parliamentary democracy without political parties. And that's not a joke. This new political reality is already dawning on the Himalayan kingdom just as it prepares to celebrate the second anniversary of its first elected government. Bhutan evidently is in an intractable political mess, with its ruling Druk Phuensum Tshogpa (DPT) and opposition People's Democratic Party (PDP) facing disqualification for defaulting on repayments of the bank loans they took to fight the country's first general elections on March 24, 2008. The party leaders stress that they have no money to keep their offices open, let alone pay off the loans. The DPT has shut several of its district offices as the ruling party does not have the funds to pay rents. Only a few PDP offices function in the 20 districts that constitute Bhutan. The crisis is not just about a financial mess. The parties concede that their membership numbers are nose-diving, posing yet another threat to democratic Bhutan. The DPT's membership fell sharply from some 12,000 in March 2008 to about 3,800 in July 2009. The PDP has all of 470 registered members. "The two parties are now charging their members less fees than what they did in 2008 in a desperate attempt to hold them back," says Jigme Tshultim, speaker of the elected National Assembly, the 47-member lower house modelled on India's Lok Sabha. Ironically, the parties cannot even launch a membership drive for they have no funds for it, says Tobgay. The state of Bhutan's democracy — a gift from its progressive kings who had steered the country to the 2008 election — is an issue that has been rocking India's neighbour for a while now.
"We are deeply worried about a bankrupt political system," Bhutan Prime Minister Jigme Y. Thinley says. "There can be no democracy without political parties," he adds. Thinley says the MPs are spending "from their salaries" to try and keep the offices of the political parties running. "It is less than an ideal situation," he says. To be sure, Bhutan has only two registered parties and the country's Election Commission has now slapped a terse notice on both, asking them to clear their loans or face the consequences. Thinley's DPT owes Nu 25 million to the banks in unpaid dues, while Tobgay's PDP owes 20 million to its creditors in the Bhutanese currency, equivalent to the Indian rupee in value. These are tidy sums in impoverished Bhutan, a small country of 6,34,982 people living in an area of 38,394 square kilometres. If anything, the parties' dues, with the interest on the loans accumulating, are ballooning and so are the concerns for the country's nascent democracy. The two parties spent the money for the elections, and thought they would be able to repay the loans once their political bases grew and more people paid their membership dues. But two years after the election, politicians rue that the Bhutanese people are not very enthusiastic about joining a political party and paying money — however nominal — for it. Used to a benign monarchy, many don't see democracy as something worth paying money for. In all fairness, Bhutan is new to democracy. And it is only natural that it will go through trials and tribulations before the country ushers in democratic norms and culture, says Nitasha Kaul, a Bhutan expert at the Centre for the Study of Democracy in London. Indeed, Kaul says, it is not easy to judge if democracy is working in a country that has only just moved from an absolute monarchy to a constitutional one. The parameters — or democracy yardsticks — vary from country to country. But among the prerequisites are free elections, a viable Opposition, a fair judiciary and a vibrant media. On most of these fronts, Kaul holds that Bhutan has not so far fared badly. Its judiciary is free, and the general election of March 2008 was lauded by international observers. The media is blossoming, with at least five privately-owned newspapers giving the state-run Kuensel, Bhutan's sole newspaper for decades, a run for its money, says Tenzing Wangdi, managing director of the Bhutan Observer, the first private newspaper to hit the stands after Bhutan embraced democracy. If Phuntsho Wangmo, head of news operations at the Bhutan Observer, a paper often critical of the government, is to be believed, the DPT regime is not doing too badly on the development and economic fronts. For one, the Thinley government has taken up an ambitious project to connect its 205 blocks with motorable roads — no mean feat in a country with inaccessible mountainous terrain. For another, Wangmo says the government is turning the country around economically, putting it on a path of self-reliance. In fact, Bhutan is now slated to emerge as an energy power house in the region. Under an agreement with India, it plans to produce 10,000 mega watt of hydroelectricity by 2020. From the Tatas to the Ambanis and the Mittals, Indian business tycoons are flocking to Bhutan as the country relaxes its foreign direct investment policies. "We are talking to big Indian investors as we look at the vast Indian market to sell our products," the Prime Minister says. All this means a lot to Bhutan's people and its business houses. "An expanding economy means more jobs for the young, educated Bhutanese," says Bhutan Chamber of Commerce and Industry president Topgyal Dorji, who heads the Tashi group of companies, one of the top local business houses. In its pursuit of a democratic society, Bhutan has not abandoned its guiding principles of gross national happiness (GNH), an index used to measure the "health, happiness and well being" of Bhutan's citizens. "The GNH is now very much part of government planning and programmes," says Centre for Bhutan Studies president Karma Ura, who has spent years creating the index to measure development in Bhutan. The monarchy remains supreme in Bhutan, but as the head of the state and as the symbol of the country's unity, as envisaged in Bhutan's Constitution, adopted in 2008. "We look to the monarch for guidance. But it is the Cabinet and the elected representatives that run this country now. There is absolutely no interference in government work by the king," a senior minister says. Bhutan heaves with uncertainty as its political establishment seeks to find a way out of the crisis. "Few are happy in Bhutan with the outcome of democracy so far. No one knows what will happen next," a senior civil servant says. Clearly, the political parties urgently need funds for their revival. The Bhutan election law permits the parties to accept money only from its members by way of registration fees, membership fees and voluntary contributions. They cannot take donations from outsiders, including businessmen. Foreign donations are prohibited. To help the parties tide over the crisis, the country's Election Commission recently raised the voluntary contribution amount from Nu 1,00,000 a year to 5,00,000 a year. "But the parties can receive voluntary contributions only from its members under the election law," Bhutan's chief election commissioner Kunzang Wangdi says. Prime Minsiter Thinley maintains the only way out of the present mess is state funding of political parties, a hot topic of debate in Bhutan. Despite its brute majority, the DPT could not get its proposal through in Parliament as several of its own MPs joined the two Opposition members in shooting the proposal down as unconstitutional. The speaker acknowledges that Bhutan's constitution has "no provision for state funding of political parties". The 25-member National Council — the upper house of Bhutan's Parliament — has rejected the proposal too, says council chairman Namgye Penjore. "All this will only push Bhutan's political parties into the hands of private businesses for funds. That would really be a sad day for Bhutan's democracy," Thinley says. PDP leader Tobgay is opposed to state funding of the bankrupt parties for "constitutional and moral reasons". But he says the crisis raises a more fundamental question. "Do the people really want political parties in Bhutan? If they really did, I don't think funds would have been a problem for us," he says. Strong words, but the time has come for strong measures. "The parties must clear their dues by 2012, a year before the next general elections," says the chief election commissioner. The warning is loud and clear. And it's not just to the parties, but to Bhutan's democracy itself. | ||||||||||||||||||||||||||||||||||||||||||
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Palash Biswas
Pl Read:
http://nandigramunited-banga.blogspot.com/
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