Mr. Speaker Sir,

    With your permission, I rise to present the Budget  and  the  Annual  Financial  Statement  for  the  year 2008-09.

1.1  While presenting this Budget, we have tried to focus attention on the major socio-economic concerns of the common people of the entire country, and as a part of that, specially of West Bengal. Even within the existing State structure, these concerns are about the need to increase employment generation to the maximum extent possible and, through that, increase income for reducing poverty. Keeping this main concern and objective in view, the policy should not be one of only increasing the level of production, but be directed towards increasing production and expansion of services in such a manner that will lead to employment generation as far as possible. This employment-oriented expansion of production and services will be possible when, in our view, there is also a lessening of monopoly power and a move towards more equal competition in different spheres of production and services. For this move to be effective, there is also a concurrent need for increasing the empowerment of common people in terms of land, capital, education and health. There is also a simultaneous need for improving the infrastructural facilities, so that the common producers and service-providers can have access to these facilities. At the same time, it is also essential to control the rate of inflation in order that the real income of common people can be protected. For turning the policy towards employment-oriented growth with control of inflation and empowerment of people, it is specially important that the common people should participate in the entire process of decision-making and implementation.

1.2   The task of implementing the policy for redressing these major problems of common people in a State like West Bengal becomes specially difficult when a different kind of policy is adopted for the country from the level of Central Government. Honourable Members, it is only relevant to mention here that over the last about 17 years, a special kind of policy—a one-sided IMF-WTO guided policy of globalisation and liberalisation—has been followed from our national level. As a consequence of following this policy, none of the major problems of common people has been resolved. Moreover, several of the problems—unemployment, loss of self-reliance in foodgrains, inflation, instability in our financial sphere arising out of dependence on the First World countries and assault on the decision-making power of the State—have become more aggravated.

1.3  For reasons of this policy, a liberalised entry of imports (most of which are produced by the multinational corporations) has been allowed through a hasty withdrawal of quantity restrictions and repeated reduction of customs duties, without giving adequate time for preparation to the domestic producers and also after removing the benefits of subsidy for them. As a result, the common domestic manufacturers and the farmers have been placed at a position of unequal competition before the large multinational corporations nourished with subsidies and other forms of assistance from their respective Governments over a long period. As a result, in the overall economic structure it is the monopolistic power, and not competition, that has increased. In consequence, in our country the rate of growth of imports has been much faster than that of exports, with the effect that the gap between imports and exports, which was only Rs. 3.81 thousand crore in 1991-92 before liberalisation, has now increased alarmingly by more than 70 times and crossed Rs. 2.68 lakh crore in 2006-07 (Economic Survey, Government of India, 2007-08). That means, every year, the domestic manufacturers and farmers are now losing, in the net sense, this large share of their markets. As a result of this significant loss of markets year after year, industrial sickness has increased in all the States, and the farmers have also been severely affected. In consequence of this loss of markets for industry and agriculture and the use, in the absence of any domestic encouragement for research on appropriate technology, of an overly capital-intensive and labour-displacing technology in line with the rich countries, there has been a sharp increase in unemployment for the country as a whole. According to the latest National Sample Survey data (2004-05), incidence of unemployment (on current daily status) in the country has increased by nearly 87 lakh over the period of five years between 1999-2000 and 2004-05, and reached a figure of 3.52 crore.
   
1.4  For reasons related again to the policy of globalisation and liberalisation, there has been over a long period, a neglect of public investment in agriculture. As a result, in the entire period of liberalisation (1990-2007), the average annual rate of growth of foodgrains production has fallen to 1.2 per cent, which is much lower than the annual rate of growth of population (1.9 per cent) in the country (Economic Survey, Government of India, 2007-08, p. 155). Our country has therefore lost its position of self-reliance in food production, and had to import 55 lakh M.T. of wheat in 2006-07.
   1.5  Along with the slackening in the growth of agriculture, there has also been, in line with the policy of liberalisation, a curtailment of the public distribution system, weakening of the Essential Commodities Act and entry of large corporate houses with their monopoly power in the sphere of agricultural marketing. In consequence, prices of essential commodities, particularly of foodgrains have risen sharply in recent period in the entire country. In this context, the unilateral decision of Central Government to reduce by nearly 50 per cent the Central allotment of wheat for the public distribution system in West Bengal has hurt the interests of common people of the State and also created confusion.
   
1.6  In addition, it needs to be noted that as the Government of India started, as a part of the policy of globalisation, some liberalising measures towards capital account convertibility, the impact of the U.S. sub-prime mortgage crisis as also that of recession has already been felt in terms of volatile behaviour of the Indian share market. This is like a distant thunder with cause of concern for a possible consequential instability in the macro-economic system of our country.
   1.7  In the sphere of Centre-State relations, none of the outstanding problems of the State has been resolved. The share of Central taxes to the States has not been increased from its low level of 30.5 per cent, and the unjust burden of the Central loans on the States, particularly connected with the small savings loan, has also not been lessened. On the other hand, following the policy of liberalisation, an encroachment has been made on the decision-making power of the States even in the sphere of State subjects. As a conditionality of Central assistance, the States, for instance, have been asked to introduce the Fiscal Responsibility and Budget Management (FRBM) Act which would curtail the welfare role of the State Government. In addition, a pressure has been imposed on the States to introduce the new pension scheme, in terms of which a fund would be created by deducting 10 per cent from the salary of Government employees, teachers and others. This fund would then be used for investment in share market, and the returns will be related to pension payment, with all the uncertainties connected with such investment. The Government of West Bengal has not accepted these two policies related to the FRBM Act and the new pension scheme. The conditionalities of liberalisation have also been introduced through the Centrally Sponsored Schemes. For example, in the scheme of JNNURM, the States have been asked, as a condition of release of Central share of funds, to withdraw the Urban Land Ceiling and Regulation Act. In addition, it may be mentioned that in some other Centrally Sponsored Schemes, such as the SSA, the share of Central Government would be reduced, ignoring the views of the States, from 75 per cent steadily to 50 per cent, thus increasing the financial burden on the States.
   
1.8  Another problem has cropped up due to mechanical over-centralisation of guidelines in certain Centrally  Sponsored Schemes. For instance, in the case of NREGP, when the progress of this scheme, after overcoming the problems due to geographical characteristics of this State, was on full swing and report of the progress in 7 districts with all the necessary documentation sent to the Centre in the current year, there has been an undue delay, becouse of over-centralised procedures, in the release of Central share of funds leading to a serious problem of implementation. Confronted with this situation, the State Government had to make an advance release of its own funds to tide over the problem.
   
1.9  Honourable Members may therefore kindly note that no effective clue has been found in the policy of liberalisation to resolve the major problems of common people, specially those relating to unemployment and inflation. On the contrary, a vast majority of people has been further adversely affected by these and other problems. In the recent Union Budget, although allocations for education and health have been increased, but these allocations have still failed to make the public expenditure on education and health as proportion of the GDP to reach even half of the targets—6 per cent and 3 per cent for eduation and health respectively—as was pledged in the NCMP of UPA Government.
   
1.10  On the basis of this experience and analysis, we have been over the years proposing from this State outline of an alternative policy for the country within the existing socio-economic structure by focussing the direction on an employment-oriented growth process based on a move towards more equal competition and decentralisation. The outline of this policy emphasising—land reforms, significance of the small and medium industries along with the large industries, importance of research and application of modern labour and local resource-intensive technology, public distribution system from the national level in coordination with the States for controlling inflation, social direction of the banking system, significance of welfare role of the Government and a fundamental decentralisation in the Centre-State relations—has already been presented in the last budget and the same is not repeated now. Those aspects of this alternative policy which are feasible within the limited powers of the State Government will be the basis of my proposals of this present State Budget.