Govt improves score in meeting Budget proposals

Despite a tag of policy paralysis and frequent adjournment of Parliament sessions, the record of the government in implementing its Budget proposals has improved in the first six months of the current financial year, compared to the corresponding period last year.

This time, the strike rate stood at over 60 per cent versus 44 per cent in April-September of 2010-11.

Of the 106 announcements made in the Budget, 2011-12, the finance ministry's mid-year analysis said 64 had been carried out. Last year, at this time, the government had implemented 29 of the 66 Budget proposals.

However, some announcements are only partly implemented or are facing rough weather ahead.

For instance, the government has tabled a Constitution Amendment Bill to roll out the goods and services tax (GST), but is yet to come out with a related announcement on framing a draft model GST Bill for the Centre and states.

The analysis said the draft model legislation would require concurrence on key concepts underlying GST. "The discussion paper is under finalisation, which will be discussed in the sub-working group. The drafting of GST legislation can be taken up only after a consensus is reached on key concepts," said the analysis, tabled in the Lok Sabha by finance minister

Pranab Mukherjee.

The document also put under the "implemented" category a proposal to consolidate all prior regulations and guidelines on foreign direct investment (FDI) policy into one comprehensive document.

In fact, the third consolidated FDI policy document was released even before the beginning of the current financial year.

It removed the controversial press note that makes it mandatory for joint venture partner to get no-objection certificate from the existing collaborating firm to start its venture in the same field.

The proposal in the Budget had also said the FDI policy is to be further liberalised. Though the document assesses the performance for the first half of this financial year, what happened thereafter assumes much more importance.

While the government has put on hold 51 per cent FDI in multi-brand retail, it is likely to go ahead with its move to increase FDI in single-brand retail from 51 per cent to 100 per cent.

Among the proposals yet to be implemented are the finalisation of the Direct Taxes Code Bill for its enactment so that the current Income Tax Act is replaced from April 1, 2012, tabling a Bill to amend the Fiscal Responsibility and Budget Management Act, 2003, introducing a Bill to shift management of the government debt from the RBI to an office in the finance ministry and extending the nutrient-based subsidy policy to urea.