Pre-Budget Discussions

The Union Finance Minister Shri P. Chidambaram met the major trade union leaders, here today as part of pre-budget consultations with various interest groups. Welcoming the trade union leaders, Finance Minister indicated that the major thrust of the Union Budget for 2006-07 would be to encourage activities which would create additional jobs and enhance value addition. There would be focus particularly on rural areas, agriculture and unorganised sectors. Shri Chidambaram further mentioned that all available statistics indicate levels of jobs creation in 2004-05 and 2005-06 higher than in earlier years and added that it was not enough to provide employment to all potential employment seekers. Finance Minister then requested the trade union leaders to offer their suggestions for the forthcoming Union Budget for 2006-07.

In wide-ranging discussions that followed, the major suggestions made by the trade union leaders included the following:

Comprehensive legislation required for Social Security for agricultural and unorganised labour. Appointment of the Sixth Central Pay Commission. Enhancement of the exemption limit for the personal income tax to Rs.2 lakhs. Restoration of interest rate for EPF to 9.5 per cent (as against 8.5 per cent announced by the government). No disinvestments in profit making central sector enterprises. Removal of all Ceilings on bonus. Enhanced 9 per cent interest on senior citizens' savings accounts. No passing on of Fringe Benefit Tax to employees. Imposing a ban on iron ore exports to protect domestic iron and steel industry.

Encouraging employment in SSIs and self employed sectors through enhanced credit.

Setting up Workers Capital Trust to manage part of the worker 's funds such as provident fund.

Encouraging distribution of equity to workers.

Making highly profitable industries pay more taxes.

Recovering a part of non-performing assets of the banking sector.

No privatisation of airports.

Encouraging permanent rather than contractual employment.

Enhancing tax/GDP ratio and investment GDP ratio further.

Increasing import duties on luxury and consumer goods.

Introducing a tax on agricultural income for farmers with adequate irrigated land holding.

Imposing taxes on lavish spending on social ceremonies such as birthdays and weddings and on service incomes.

Strengthening the public distribution system.

Maintaining fertilizer subsidy.

Allocation of at least 10 per cent of budget on education.

In line with the Rural Employment Guarantee Scheme, launching another programme for urban areas.

Not investing pension funds in the share markets.

No structural adjustment loans from the World Bank.

More public investment in rural areas, agriculture and social sectors. The meeting was attended by representatives of Bhartiya Mazdoor Sangh, Indian National Trade Union Congress, Centre of Indian Trade Unions, Hind Mazdoor Sabha, All India Trade Union Congress, United Trade Union Centre (LS), United Trade Union Congress, National Front of Indian Trade Unions, Trade Union Coordination Centre and senior officers of the Ministry of Finance.