Whichever government comes to power will have to impose a Kargil tax. It is estimated that Rs 32 crore has been spent each day for six weeks in flushing out the intruders from Kargil. The increase in fiscal deficit due to the Kargil conflict has to be made up.

While there is no magic number for the appropriate level of fiscal deficit, we feel that fiscal discipline must, however, not be at the cost of investment expenditure.

On subsidies: There has to be a national consensus on subsidies. Subsidies should be well-targeted and must only be for the poor, the needy and the disadvantaged. Farm prosperity cannot be sustained merely on the basis of subsidies that benefit only a small section of the farming community.

On disinvestment: The finance minister has taken credit for Rs 9,000 crore disinvestment in 1998-99. But actually, it was only gimmickry. The government has raised this money by increasing cross-holdings in oil and telecom companies. This move has eroded the market capitalisation of several of our public sector jewels by a huge margin.

We support disinvestment and will seriously implement the Disinvestment Commission recommendations which have been ignored so far. The proceeds will not be used for meeting gaps in budgetary resources. There is no doubt that the role of the public sector has to be redefined due to pressure on public expenditure from more essential social sectors.

On financial sector reforms: We would like to follow the Malhotra Committee recommendations on full-fledged financial sector reforms. Banks should be given more autonomy to introduce new technology, recruit laterally and restructure themselves.

On India's WTO commitments:We should strive for a consensus on moving towards a global market regime. Meeting all international treaty and multilateral agreement obligations, we should work to use the WTO to gain additional market access for products and services of interest to India. The Congress will proactively participate in all global discussions for influencing the agenda and enhancing the country's bargaining stength. We should work with other countries to push for faster dismantling of controls on trade in textiles and agriculture.

On tax reforms: We should try and expand the tax base by improving the efficiency of the administration. We are also committed to the introduction of a dual VAT system, one at the Central level and the other at the state level. The Budget move to rationalise the excise duty structure was welcome although the manner in which this was proposed to be combined with surcharges made it difficult to assess their precise impact in reviving the economy. On imposition of a tax on agricultural income, I can only say it is a state matter and states should think on how this important area of revenue collection can be tapped.

On the defence budget: In the light of the conflict, the defence budget will have to be increased as there cannot be a compromise on the defence of our country. Given the resource constraints, some hard decisions need to be taken in this regard.

On centre-state relations: The Finance Commision should be asked to review the entire gamut of centre-state-local body financial relations. Centre-state coordination is absolutely critical for better project planning and faster project implementation in the infrastructure sector.

On small-scale sector: The small scale sector needs encouragement for making it more competitive and efficient. Special financial, marketing and technological promotion measures are necessary for a sector which is the backbone of the Indian economy.

On infrastructure development: We are committed to ensuring increased public investment in infrastructure sector. The Central Plan is the main vehicle for public investment. In 1998-99, there has been a shortfall of almost 16 per cent in Central plan outlay. This is not just on account of a fall in the internal and extrabudgetary resources of public enterprises but also because of a fall in the level of Budget support itself. This has never happened when the Congress government has been in power. A fragile coalition can never ever take the hard decisions required to push up economic growth by 8-10 per cent annually as this would require an investment growth of 32 per cent of the GDP in the short term.

On social sector spending: There is no doubt that we need to invest more in health, education and poverty-reduction programmes. We have proposed a fundamental reorientation in the structure of government expenditure with enhanced investment in education, health, nutrition, irrigation, agriculture and other essential sectors. On agriculture: Agriculture is the engine of growth. Inflation which was at seven per cent in March has now reached a level of 1.68 per cent due to agriculture. We should review the agricultural credit system and all controls, including licensing and regulations that come in the way of increasing the income of farmers.

--As told to Santosh Tiwary