CHENNAI: Describing the Union budget as a "tepid, colourless exercise," Chief Minister Jayalalithaa on Tuesday said Finance Minister P. Chidambaram had lost a "golden opportunity" to take the country's growth process on to a new trajectory.

No concrete steps have been spelt out for building infrastructure, which is the key to a higher growth rate, she said in a statement. It was hard to find any constructive new idea in the budget which tinkered with tiny details but lacked vision. The budget had "simply run out of steam, stumbling as it does over the tall promises made in the past."

Noting that the budget showed reduced subsidy for LPG and kerosene and foodgrains under the public distribution system (PDS), she said the "hidden agenda" was to push through the price increase on PDS rice, which was recently put on hold. The budget clearly hinted at plans to hike prices of LPG and kerosene.

State taxes

The Finance Minister had unilaterally meddled with State taxes by categorising LPG in the list of "declared goods" so that the entire burden of price control fell on the States. He appeared to have a single point agenda of "completely emasculating the States" by denying them even what they had been receiving in terms of Central Assistance for the Plan. "It is most deplorable that the grant under Normal Central Assistance for State Plans has been drastically cut down from Rs. 13,541 crore in the budget estimate 2005-2006 to Rs. 10,916 crore in the budget estimate 2006-2007."

Instead of providing Central loans to the States, a changeover had been made in the current year requiring States to access the open market even for their normal borrowings to finance the Development Plan, she pointed out. Referring to the increased rate of service tax, she said consumers across the board would be affected by the resultant increase in prices. "This will clearly affect all sections of the economy with 54% of GDP coming from services," she said. Although there was a "bland statement" that reconstruction and rehabilitation on account of natural disasters would be supported, there was no provision for it.

Insisting that the budget had nothing for the farmers, she wondered what happened to the promised financial support to cooperative institutions. "It appears that this was the flavour of the season in last year's budget, promptly forgotten in this year's budget."

According to her, the States had got a raw deal in the budget. "Democratic decentralisation has been given the go-by with increased centralisation in the Federal Government."

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