Friday, May 28, 2004

Finance: Common minimum programme (CMP)

The ruling United Progressive Alliance (UPA) coalition announced its CMP yesterday, signed by the current coalition partners and supported by the Left parties from outside. The full text is available at The Hindu.

The key financial aspects are:
  • Elimination of revenue deficit by 2009
  • Subsidies to focus only on the needy constituents, details of which will be tabled in the Parliament within 90 days.
  • The government is committed to early introduction of VAT
  • Measures to increase tax to GDP ratio will be implemented such as (a) expanding the base of taxpayers (b) increased tax compliance and (c) efficient tax administration
  • [Chidambaram special...] Special schemes to unearth black money will be introduced
  • SEBI will be further strengthened
  • Profit making PSUs will not be privatised. But PSUs will be allowed to go to the markets to raise resourced. [In other words, the Govt. will not reduce its stake by selling that to public, but fresh shares can be floated in the market to raise money for the PSU - in the process the Govt. equity will invariably anyway come down.]
  • Any privatisation revenue [from loss-making PSUs] will be linked to designated social sector schemes
  • Sick PSUs may be sold off or closed down

Previous item: Finance: Chidambaram's first press conference

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