Budget 2014: Parliament session to begin tomorrow, Modi to target record asset sales

PTI/REUTERS
Published Jul 6, 2014, 7:57 pm IST
Updated Mar 31, 2019, 9:01 pm IST
Railway Budget scheduled for July 8, economic survey to be released next day
Narendra Modi Government to present the first budget on July 7 (Photo: DC)
 Narendra Modi Government to present the first budget on July 7 (Photo: DC)

New Delhi: Presentation of the first budget by the Narendra Modi government will be the highlight of the over month-long session of Parliament starting tomorrow amidst signals that the issue of price rise could generate heat. Opposition parties have a number of issues to target the government, including the recent controversy over the government rejecting the name of former solicitor general Gopal Subramanium for appointment as a judge of the apex court, the rape case controversy surrounding Union minister Nihalchand and rising incidents of atrocities against women in the country.

A highlight of the proceedings on the opening day is expected to be a statement from External Affairs Minister Sushma Swaraj in both Houses of Parliament on the situation of Indians in Iraq. While presentation of the Railway Budget is scheduled for July 8, the economic survey will be released the next day and Union Budget 2014-2015 will be presented on July 10.

 

Read: Price rise likely to generate heat in Budget Session

The issue of the Leader of Opposition in Lok Sabha could see a confrontation between the government and the Congress during the session if the post is denied to the main Opposition party, which has secured just 44 seats in the 543- member House. Leaders of various parties want the issues of price rise, rail hike and federal structure to be discussed during the session, which concludes on August 14.

The session will have 28 sittings and 168 working hours. Since the Standing Committees for various ministries are yet to be constituted, the demands for grants for various ministries will be passed by both Houses by July 31 after discussion in Parliament instead of the committees. Parliamentary Affairs Minister M Venkaiah Naidu has maintained that the government is ready for a discussion on any issue and has appealed to the Opposition to "cooperate" to ensure that the decorum and dignity of Parliament is maintained.

 

The government will seek to raise up to a record $11.7 billion in asset sales in its maiden budget this week, a senior government source said, bolstering state finances and buying time for structural reforms to revive a weak economy.

The privatisation target could reach 700 billion rupees; almost equal to all proceeds over the last four years, in a budget Prime Minister Narendra Modi hopes will launch the growth and jobs agenda that in May won him India's biggest election mandate in three decades.

"The finance ministry has approached different ministries to increase the divestment target," said the senior official with direct knowledge of the budget process. The previous government had pencilled in sell-off proceeds of 569 billion rupees.

 

The 63-year-old premier has made a decisive start by naming a streamlined cabinet, approving a slew of infrastructure projects and embarking on what promises to be a whirlwind first year of trade diplomacy.

But his government has been plagued too by the economic ills that brought down its predecessor: weak growth and high inflation caused by spending too much and investing too little.

Read: Narendra Modi to target record asset sales in budget: source

Despite the market reforms of 1991 that brought down the curtain on decades of socialist isolation, tracts of Asia's third-largest economy remain off limits to outside investors.

 

Modi wants to open up industries like defence, but selling controlling stakes in bloated state enterprises is out of the question. They are not competitive and any job cuts ordered by a foreign owner would cause an outcry.

Instead, he will whittle down state stakes in firms that have already been partly sold, like Steel Authority of India Ltd, without surrendering overall control, said the official and other sources familiar with the plans.

Stocks have enjoyed a Modi boom, rallying 23 percent this year. Listed state firms have outperformed on hopes that wider ownership would discipline managers and that their bottom line would benefit from a loosening of price controls.

 

Leading the pack is Indian Oil, which has gained 62 percent in 2014. ONGC, another oil firm, is up 46 percent. Coal India has risen 36 percent.

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