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No interim budget: Jaswant

By Our Special Correspondent

NEW DELHI July 10. In the backdrop of speculation over possible tax sops being extended to the salaried class, the Finance Minister, Jaswant Singh, today ruled out the prospect of an interim budget. At the same time, he said "some proposals'' would be made to cheer the consumer and expand the economy. "Unless the consumer consumes, how can the economy expand,'' he said.

Speaking after a meeting of the Trade and Industry Advisory Council, Mr. Singh hinted at steps to boost consumer spending, but these may not necessarily mean a review of budgetary measures which had reduced the scope of tax concessions. Rising revenue collections and the new Finance Minister's comments about the need to put more money in the consumers' hands on taking charge of his portfolio had fuelled expectations about such moves.

He responded positively, however, to industry's demand for a review of the ordinance to deal with the huge non-performing assets of banks and financial institutions. The ordinance had been criticised by leading chambers like the Confederation of Indian Industry and the Federation of Indian Chambers of Commerce and Industry, which felt that it went against the norms of natural justice by not distinguishing between wilful and non-wilful defaulters.

He said a `relook' would be taken at the ordinance as the Government's intention was not "expropriatory.'' The aim was that the borrower should honour his borrowings and the lenders' dues should go back to the lender. The ordinance would not be revoked but changes could be made while converting it into a bill, he said.

The meeting, attended by leading industrialists, was largely meant to consider the two critical legislation in the electricity and petroleum sector on which presentations were made by the Petroleum Minister, Ram Naik, and the Power Minister, Suresh Prabhu. The Electricity Bill 2002 aims to restructure the power sector to make it commercially viable, while the Petroleum Regulatory Board Bill 2002 is to enable the creation of a regulator for the petroleum sector after dismantling of the administered pricing mechanism.

While promising more steps to promote better corporate governance in the light of major financial scandals like those of Enron, Worldcom and Xerox, he noted that the job of the Finance Minister was that of a facilitator rather than a policeman. Speaking to the media after the meeting, Mr. Prabhu said the Electricity Bill would allow the generator to sell power directly to the bulk consumer. He clarified that the bill would be discussed in depth by the Cabinet after being considered by the parliamentary standing committee. Mr. Naik said the common carrier pipeline had been an issue of concern in which the owner had the first preference and the surplus capacity would be allowed to be given to others. The rates would be decided by the proposed Petroleum Regulatory Board to be set up under the bill, he said.

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