New Delhi, Jan 28: Jamaat-e-Islami Hind has sent some suggestions to the Union Ministry of Finance for the Budget 2016-17. The suggestions are related to social sector, rural development, equity-based financing and interest-free farm credit.

A consultation meeting of national office bearers of the Jamaat and some economists and experts was held here at the Jamaat headquarters. After deliberation on issues related to the National Budget, the meeting adopted a resolution carrying four important suggestions for the Budget 2016-17. A copy of the resolution has been sent to the Union Ministry of Finance.

Full Text of the Resolution:

SUGGESTIONS FOR BUDGET 2016-17

Budget making is in the making. We take this opportunity to present our suggestions so that the exercise may become more purposeful in taking the economy of this great nation ahead in an improved manner.

1:00 Allocation to Social Sector

1:01 We appeal for greater allocation to social sectors. Even the sectors where parity is maintained, the incremental cost on account of inflation should be added; otherwise such parity leads to effective decrease in allocations

1:02 The ever-increasing role of private sector in education and health-care has led to spiral increase in the cost of these services, taking these facilities out of the reach of the common man. There is the need of taking these services out of PPP mode, increasing the government’s role in their development.

1:03 We suggest allocation of 6 per cent of GDP on education and 3 per cent of GDP on health-care.

2:00 Rural Development

2:01 Development of urban areas is welcome but this should not impinge upon rural development. Rural areas should be developed while keeping them rural and not making them urban or ‘Rurban’ as such. Simply enough, by providing primary facilities like electricity, sanitation, education and health-care, the pace of migration from villages to towns and cities may be slowed down. There is every possibility of witnessing U-turn in the migration if this is adopted properly. Government of India should not leave this task to Panchayats or state governments but should show the way by positive indulgence.

3:00 Resource Generation

3:01 The Honorable Finance Minister, in the Budget Speech 2014-15, rightly described the need for generating non-debt-based resources:
“…. We cannot leave behind a legacy of debt for our future generations. We cannot go on spending today which would be financed by taxation at a future

date. There is an urgent need to generate more resources to fuel the economy…” [Para 6 of the speech]

3:02 Equity based financing is the panacea. We suggest Revenue Sharing Equities financed through small savings. The fund so generated may be applied for national projects like infrastructure developments and the revenues earned after completion of the projects may be shared with the equity-holders. A suitable scheme may be designed, providing benefits for the taxpayers, particularly salaried ones. Additionally, such equities may be made transact-able in the stock market to make them more attractive. One may refer to Rajiv Gandhi Equity Savings Scheme, which was announced by the then Finance Minister in Budget 2012-13. [However, the scheme need not be copied as such.] This proposal basically differs from bonds issued by the Government because here both collections of funds would be equity based and their payments based on revenue generated, instead of interest thereon. The core idea behind this suggestion is that high quantum of funds may be generated in the country itself. Further, this may go extra miles in increasing enterprise in the nation.

4:00 Interest-Free Credits

4:01 Budget 2007-08 had ushered in the concept of interest-free credits. Three such schemes were announced. One was for setting up institutions for providing training to farmers for good water management practices. Second interest-free loan was for preparation of projects for proposals under PPP. The third proposal was for seed money to ITIs selected for upgradation. We do not know why the idea did not click and was not continued in later years. We, hereby, propose for interest-free mode of finance for farm credit. The dilemma of farm-credit today is that a number of suicides are attributable to the interest-based loans and in many cases the governments have written off, both principals and compounded interests on the unrecovered loans. Interest-free farm credit may be a solution to the problem.
We are submitting the suggestions with the hope that these will be considered and if found useful will be accepted in right earnest.