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Pay heed to concerns of Naveen Patnaik on Union Budget 2020

By Satya Narayana Sahu | PUBLISHED: 02, Feb 2020, 13:26 pm IST | UPDATED: 17, Apr 2020, 16:33 pm IST

Pay heed to concerns of Naveen Patnaik on Union Budget 2020
Odisha Chief Minister Shri Naveen Patnaik has justly expressed his concerns on certain provisions of the Union Budget which would adversely  impact Indian economy,  seriously jeopardize the fiscal health of the States and weaken the federal structure enshrined in our Constitution. His public expression of concerns on some aspects of the budget was preceded by his whole hearted endorsement and welcome of the following budgetary proposals:

a)  allocation for setting up Kisan Rail and Krishi Udan for a seamless national cold supply chain for preservation and rapid transportation of perishable goods

b) expansion of  PM-KUSUM scheme, started in July 2019 to enable farmers to reduce their dependence on fossil fuels and rely more on solar energy, to cover 20 lakh farmers for setting up stand alone solar pumps

C)  decision for removal of Dividend Distribution Tax(DDT) paid by the companies and adoption of classical system of dividend taxation under which the companies would not be required to pay DDT

D)  Concessional Tax rates to Cooperatives to put them at par with  corporates as per the demand of the State of Odisha,

E) announcement of New Education Policy and FDI in the education sector His concerns and apprehensions that certain other proposals of the Union Budget would imperil  harmonious Centre State relations are worthy of serious reflection. His first concern is that the almost all allocations under the Centrally Sponsored Schemes have been stagnant. Shri Naveen Patnaik is absolutely right  in flagging this point and his concerns in this respect correspond to observation of the States in the 14th Finance Commission Report. The States took a view that  "The significant increase in the number of Centrally sponsored schemes and the funds allocated for them have led to a corresponding decrease in the untied resources available to States."

In such a context the apprehensions of Shri Naveen Patnaik is reasonable and just and these need to be addressed by the Government of India to ensure better fiscal health of the States. It is all the more important to take up the apprehensions very seriously taking into the  slump suffered by Indian economy and the massive fall in demand and consumption. 

The second concern of Shri Patnaik is that the divisible pool of Central taxes has shrunk by almost Rs 59,000 crore and it will reduce Odisha’s share by about Rs 3000 core. Given the fact that the States of the Union considerably depend on divisible pool of resources to take forward their development and growth the shrinking of such resources would jeopardize their progress. The concern is indeed based on sound reasoning and it has been expressed by States in their submissions to successive Finance Commissions. It has been rightly observed that "There is significant exclusion of States from the divisible pool. These are eroding the transferable resources to the States and cause discrimination to them". 

The Chief Minister also expressed his concerns that the Finance Minister in her speech did not include any  archaeological site of Odisha in the proposed sites to be developed by the Centre as iconic sites where on site museums would be established.  Odia language has been conferred with the status of a classical language and  archaeological sites  of Odisha have marveled historians and international scholars alike  for ages. Mahatma Gandhi,  whose 150th birth anniversary is being celebrated across the country,  had described Odisha as an ancient land. The Government of Odisha is now vigorously engaged  in transforming Jagannath temple in Puri to a world heritage site. l It would be just and fair on the part of the Union Government to pick up  at least one archaeological site of Odisha for inclusion in the proposed sites which would be developed as iconic sites. The demand of Odisha Chief Minister that there should be a National Tribal Museum for Odisha is legitimate, compelling and convincing. It deserves to be accepted for the larger cause of tribal people whose culture and heritage assumes significance for countering the dangers of global warming and climate change. 

Flagging another point concerning drinking water Shri Patnaik stated that it is a  national priority and he regretted   that allocation of Rs. 11,500 crore for this purpose for the whole country is too little. He cited the example of  Odisha where  about Rs 3600 crore have been earmarked for providing drinking water to people. The point raised by Odisha Chief Minister is absolutely right and reminds us of the perspective of Mahatma Gandhi who on 1st January 1918 while addressing the meeting of Municipality workers of Ahmedabad had defined Swaraj in terms of access of people to grain, clean air and clean water. Any attempt to allocate an insignificant amount for the purpose of drinking water is a negation of Swaraj. At a time when the world is confronting water famine allocation of paltry sum  in the Union Budget for drinking water is not acceptable. 

The Budget as whole has not been seen to be helpful to generate demand,   arrest stagflation and boost growth which has come down to 5 per cent. It should have provided solutions to the economic woes confronted by people.  It is in this context that Shri Patnaik worryingly referred to the fall of  Sensex by close to 1000 points and stated,  “Investor confidence is important for fresh investments to come in, to spur growth which is the biggest challenge now. This will have a huge impact on job creation and livelihood options for our youth. ” Such a statement of Odisha Chief Minister brings out the lacunae in the budget to attract investment, stimulate demand and create livelihood opportunities. The concerns, pain and anguish expressed by Shri Patnaik on the Union budget merits serious consideration and corresponding concrete action to salvage our economy from stagflation.

.The author served as Officer on Special Duty and Press Secretary to President of India late Shri K R Narayanan and had a tenure in Prime Minister’s Office and Joint Secretary in Rajya Sabha Secretariat. Views expressed in the article are in his personal capacity.  
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