Several key announcements made in the Union Budget 2010-11 have not been implemented yet, the mid-year economic analysis tabled in the Lok Sabha on Tuesday shows.
Consensus on goods and services tax (GST), setting up
of the Financial Stability and Development Council,
additional banking licences to private sector players, meeting the disbursal target of Rs20,000 crore by India Infrastructure
Finance Company Ltd (IIFCL) and enactment of the Food
Security Bill are among the Budget proposals that are either in the drawing stage or have not taken off.
The Budget had announced that a wide consensus on GST would be generated during this year.
“Earnest endeavour to be made to introduce GST along with the Direct Tax Code in April, 2011,” it said.
But, there’s no consensus in sight on the introduction. The mid-year analysis states that, “one sub-working group is working on develoment of draft central GST and model state GST legislation, while the other is working on finalisation of processes to be followed.”
The Budget had also stated that “with a view to strengthen and institutionalise the mechanism for maintaining financial stability, an apex-level Financial Stability and Development Council to be set up to monitor macro prudential supervision of the economy.”
So far, the process for setting up the Council has only been initiated, but has not been implemented yet, the mid-year analysis has pointed out.
On the proposal of setting up a Financial Sector Legislative Reforms Commission to rewrite and clean up the
financial sector laws, the finance ministry review points out that a concept paper was circulated across various ministries, the Reserve Bank of India (RBI) and the Securities and Exchange Board of India.
Also, “the roadmap for implementing the decision is being finalised.”
Even as the Budget had promised that the RBI would issue additional banking licences to private sector players, so far only a discussion paper has been brought out by the central bank.
Although regional rural banks are to be provided further capital so that they have adequate capital base to support increased lending to the rural economy, in reality a report of the RBI deputy governor on the matter has been prepared, and comments of the RBI and Nabard are under examination.
Yet another significant announcement in the Budget was that IIFCL disbursement for the infrastructure sector should reach `20,000 crore by March 2011. The mid-year review shows that IIFCL is taking steps to meet the target.
Enactment of the Food Security Bill, announced in the Budget, is another unfinished job of the UPA government. The economic analysis states that “once the directions of empowered group of ministers on the provisions of the proposed law are received, the draft bill would be prepared.”
As for the allocation of Rs1,900 crore to the Unique Identification Authority of India for 2010-11, the government review paper says that “the objective of the phase I of the scheme has largely been achieved.”
Levy of clean energy cess is also an area where the government is yet to implement the proposal. The Budget had announced that levy of clean energy cess on imported coal and coal produced in India at a nominal rate of Rs50 per tonne to build the corpus of the National Clean Energy Fund.
The mid-year analysis indicates that a draft cabinet note, seeking approval of guidelines for utilisation of the clean energy cess, has been forwarded to the prime minister’s office.
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