Refashion lending plan in the interest of minorities: Left

NEW DELHI: In a repeat of the drama witnessed over the OBC quota, the allies of the Congress have stepped in to claim credit for pushing another community-oriented proposal ��� refashioning the lending policy of banks for allowing 15% disbursement of funds to Muslims. This forms part of the Left���s wish list to P Chidambaram as he prepares the Budget.

The finance ministry is not quite enthusiastic about the idea as bank managements are not in favour of it. While distorting the current disbursement policy, it may not have the intended effect as it would be cornered by the well-to-do among Muslims.

But the Left is maintaining that the government should act on the proposal as it was a promise made in the wake of the Sachar panel recommendations. Besides this, the Left wants the government to allocate 15% of total resources on development programmes for minorities, particularly Muslims.

The Leftists have been demanding a sub-plan for minorities in the 11th Five Year Plan as ���the Sachar Committee report has shown the Muslims to be socially, economically and educationally backward���.

The demand for 15% priority sector lending by banks for minorities will put pressure on the finance ministry to formulate a response. The ministry has also been evasive of the demand for setting targets under the 15-point programme for minority welfare. While six ministries have sent their earmarked targets, the finance ministry remained silent on the scheme for enhanced credit support through priority lending.

In its Budget wish list, the Left will repeat its old demands such as raising the Securities Transaction Tax and introducing long-term capital gains tax. The Left wants the government to fulfil its NCMP commitments on agriculture, education, health and social security for unorganised sector workers. This, according to the Left, would require the government to hike the gross budgetary support for the Plan by 1% of the GDP.

With increased Plan expenditures estimated at Rs 1,72,728 crore in 2006-07, the increase in Plan expenditure for 2007-08 should be by over Rs 55,000 crore.

The Left is of the view that this could be mobilised by doing away with multiple tax breaks given to the corporate sector. While scheduled corporate tax rate stands at 33.66%, the effective tax rate in 2005-06 for the corporate sector was estimated at 17%, due to various tax concessions.

The Left will seek tariff protection for agriculture and action on the recommendations of the National Commission for Farmers. The Left parties will also demand steps to check price rise and a restructuring of duties of petroleum products.