Nation and States  

Budget shifts terms of trade in favour of rural economy,defence gets more

What is India News Service, July 9, 2004, 1700 hrs IST

The UPA government's first budget has shifted the balance in favour of the rural economy, and enhanced the defence outlay by about Rs 12,000 crore.

P Chidambaram presented the budget on Thursday. Walking the tightrope between the the cities and the villages, he also signalled to the world that reforms were alive and kicking.

The government will extract an ounce of flesh from the urban tax-payer. But Chidambaram gave as well as took. The 2 per cent cess on income tax, customs and excise will slightly lighten pockets in urban India. A bigger and badder service tax will expand price tags on everything from airline tickets through insurance premia to telephone bills. But the tax burden on 14 million Indians whose taxable annual income is Rs 1 lakh or less will be reduced to zero paisa and one sheet of paper.Small-saving interest rates also remain untouched.

Computers and mobiles will be cheaper. Overall, the stock market was not very pleased, but industry was, and British Asians described it as a "balanced" budget. 

Expressing determination to eliminate "all delays" in modernisation of the armed forces, the government has hiked the defence budget by a whopping 27 per cent to Rs 77,000 crore (Rs 770 billion) as against the revised estimates of Rs 63,000 crore (Rs 630 billion). But it did away with the NDA regime's proposal to have a three year non-lapseable revolving fund.

Chidambaram said it had become "necessary" to make a higher allocation this year to keep up the process of acquiring state-of-the-art weapons.

See Rediff's infographics about the budget.

Hurriyat move: Senior leader of the Hurriyat Conference Mirwaiz Umar Farooq said Thursday that he would not take over as the interim chairman of the separatist amalgam, but would instead begin efforts to restore its constitutional shape. The leader of one of its factions resigned yesterday to help bring the splinter groups together.

But dashing all hopes of unity, Syed Ali Shah Geelani of the breakaway All Parties Hurriyat Conference said he wanted nothing to do with the faction now led by Mirwaiz Umar Farooq.

Invite for Altaf Hussain: In Karachi, Pakistani prime minister Chaudhry Shujaat Hussain said the law and order situation had improved in Sindh, and it would be the "biggest gift" if Muttahida Qaumi Movement chief Altaf Hussain returned to Pakistan. 

Pakistan-Italy ties: Pakistani foreign minister Khurshid Mehmood Kasuri, currently on an official visit to Italy, met deputy prime minister Gianfranco Fini on Wednesday and discussed matters of mutual interest.

Embassy resumes visa issue: The US embassy in Pakistan re-opened its visa section here on Wednesday after a two-day closure forced by security threats, but the British high commission remained closed. 

Overall:

Budget offered more for villages: Finance minister Chidambaram's proposals pleased the villages and the middle class.

Defence kitty got fatter: Modernisation of the armed forces was high on the government's budget priorities.

Hurriyat unity suffered a setback: Geelani of the breakaway All Parties Hurriyat Conference said he wanted nothing to do with the leader trying to unify splinter groups
of the Kashmiri separatist amalgam.

US embassy resumed work: Its Islamabad offices came back to life after 
a two-day closure following terrorist threats.