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New Delhi, Dec 21: The Lok Sabha on Monday approved the first batch of union government's supplementary demands for grants for 1998-99 proposing to augment the sanctioned provision by Rs 14,449.96 crore. Finance minister Yashwant Sinha assured the house that the centre would strive to peg the fiscal deficit within the targeted 5.6 per cent.
The minister said fiscal deficit had proved to be one of the most insurmountable problems of the recent past and sought the cooperation of the house for tackling it.
Keeping in view the experience of the past years when it had even touched 9 per cent, Sinha said he had set a realistic target of 5.6 per cent in the budget.
The economy, the minister said, was caught in a cyclical slowdown since 1995-96. The decelerating rate of industrial growth was a cause for concern, he said. Despite industrial production still being slower than last year, the growth rate was expected to be around 6 per cent, he said.
He said the country had "weathered the sanctions' storm veryefficiently". However, the east Asian crisis had hit the country hard, he said. The deepening crisis had affected many countries like Japan, Russia, Latin America and forced countries like Brazil, which had a foreign exchange reserve of $75 billion, to go to the International Monetary Fund, Sinha said. Despite all efforts, the country's trade deficit had doubled owing to the crisis, he said.
He ruled out a balance of payments crisis, adding that the country was in a spot of bother at "one time". "We did not go to the IMF and tackled it by floating Resurgent India bonds."
Responding to the criticism that while the Reserve Bank did not allow overdraft facility to states beyond a limit, the centre was permitted to do so, the minister said the debit of centre with the bank would not exceed Rs 11,000 crore in the first half of the financial year and Rs 7,000 crore in the second half. "The limits had not been exceeded," he said.
Replying to issues raised during the debate, Sinha refuted the charge that thegovernment was damaging the sugar industry by allowing free imports of the commodity. He said the government would protect the interests of the industry, the growers and the consumers.
The import of sugar was already under the open general licence when the government assumed office, he said. When it was noticed that imports were increasing, an import duty of 5 per cent and a countervailing duty of Rs 850 a tonne were imposed, he said. He assured the house that restructuring of duty on import of sugar was under active consideration of the government.
The demands approved included 46 grants and one appropriation. The augmented provision, the finance minister said, was matched by savings of departments or by the enhanced receipts and recoveries to the extent of Rs 13,169.96 crore.
In addition, a token provision of Rs 27 lakh was being sought, Rs 1 lakh for each item of expenditure for enabling re-appropriation of savings in cases involving new service or new instrument of service. The net cash outgoinvolved in the proposal was only Rs 1,279.73 crore, he said.
Print-media policy
The union information and broadcasting minister Pramod Mahajan has said that the government will continue to be guided by the cabinet decision of 1955 regarding its policy decision on print media. The cabinet decision envisaged the prohibition of publication of foreign-owned newspapers and of Indian editions of foreign newspapers dealing mainly with news and current affairs.
Talking at the Consultative Committee meeting on Monday, Mahajan said that the government is currently considering laying down norms prescribing the extent of foreign equity permissible. The former I&B minister Sushma Swaraj had however, decided to allow 100 per cent foreign equity in greenfield projects in the sector.
Regarding the film sector, Mahajan said that the policy regarding the quantum of foreign investment to be allowed is being currently considered by the government.
On the controversial film `Fire', Mahajan informed the committeethat the I&B ministry has not banned the film but has only referred it back to the Central Board of Film Certification (CBFC).
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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