Excerpts from Intervention of Finance Minister in Lok Sabha

            Following are the excerpts from the intervention of Finance Minister, Shri P. Chidambaram in Lok Sabha today:-

"Reference was made to the six basic principles contained in the Common Minimum Programme. I do not have the time to deal with all six, but let me deal with two of the principles. 

To ensure that the economy grows at least 7 to 8 per cent per year in a sustained manner over a decade and more and in a manner that generates employment so that each family is assured of a safe and viable livelihood.

The economy has grown on an average of 8.9 per cent in the four years of the UPA Government. Compare this with average of 5.8 per cent for the six years of the NDA Government. We came in towards the end of the Tenth Plan. It is because the economy grew at 9.4 per cent in 2005-06 and 9.6 per cent in 2006-07 that we were able to achieve an average growth rate for the Tenth Plan period of 7.8 per cent which was close to the target of 8.0 per cent.

The Eleventh Plan began in 2007-08. Despite predictions of gloom and doom, I had always maintained that the year will end with a growth rate close to 9 per cent. At the end of the year we have reported 9 per cent; but more refined estimates now place the growth rate at 9.08 per cent.

In particular, I would like to mention agriculture. When the UPA Government came to office, agriculture was virtually crippled. We promised a new deal for agriculture. Four years later, the results are visible. We have achieved several records in 2007-08:

· Food grain production has registered an all time record of 230.67 million tonnes. Of this, rice production was 96.43 million tonnes, which is a record. Wheat production was 78.40 million tonnes, which is a record. Coarse cereals was 40.73 million tonnes, which is a record. Pulses was 15.11 million tonnes, which is a record. Oil seeds was 28.82 million tonnes, which is a record and cotton was 25.81 million bales, which is a record.

· How did this come about? This came about through far sighted plans, a missionary approach and attention to detail. Let me list the plans. This Government launched the National Horticulture Mission. This Government undertook the renovation, repair and restoration of water bodies. This Government appointed the Vaidyanathan Committee on reviving cooperative credit institutions and implemented its report. This Government launched a mission for pulses. This Government set up the Rain-fed Area Development Authority. This Government launched the Rashtriya Krishi Vikas Yojana with an outlay of Rs.25,000 crore. This Government also launched the National Food Security Mission with an outlay of Rs.4,882 crore.

· Gross capital formation in Agriculture under the UPA's charge has increased from 10.2 per cent in 2003-04 to 12.5 per cent in 2006-07.

· In the first four years we have sanctioned proposals for Rs.50,500 crore under the Rural Infrastructure Development Fund and the corpus for this year under RIDF-XIV is Rs.18,000 crore.

I ask this House, respectfully, show me any other four year period in the history of India where so much has been done for agriculture.

This is a difficult year, but I have promised you that even in this difficult year we will achieve a growth rate which is better than what was promised in the CMP. The UPA Government will be the first Government which would have fulfilled its promise on economic growth during the five year period.

Another principle is: To enhance the welfare and wellbeing of farmers, farm labour and workers, particularly those in the unorganised sector and assure a secure future of their families in every respect.

No Government has done more for farmers than this Government. I recognise that some farmers take the extreme step of committing suicide. Suicide is a blot. We have, therefore, addressed the needs of the farmers in a systematic way and we are confident that results will be visible.

Farm credit has increased from Rs.86,000 crore in 2003-04 to Rs. 2,50,000 crore in 2007-08. The target for the current year is Rs.2,80,000 crore. Why did not farm credit grow at this rate during the NDA period?

In order to take care of farm labour who do not get work throughout the year, we introduced the NREG Scheme. In less than 15 months, the Scheme has been rolled out to the 597 rural districts of India. Why did not the NDA introduce such a Scheme?

            A paltry amount of Rs.75 was given as old age pension, and that too only to destitutes. It is our Government which raised the amount to Rs.200 per month, persuaded the State Governments to pay a matching sum of Rs.200 per month, and we made it available to all old persons irrespective of the fact whether they had any one to support them or not. Why did the NDA Government turn a blind eye to the minimum needs of old persons?

For unorganised workers, there is a path breaking Bill before Parliament. We are still debating it and I am confident that we can resolve the minor differences. However, pending the Bill, we have already introduced revolutionary schemes to benefit workers in unorganised sector. These are: the Aam Admi Bima Yojana which will provide death and disability cover to the poor; the Swasthya Bima Yojana which will provide medical cover to the poor; and the Janashree Bima Yojana which will provide health and life cover to the millions of women who are members of self-help groups. The UPA is the first Government that has focussed attention on workers in the unorganised sector.

And finally, never before in the history of this country has any Government undertaken a loan waiver scheme of the size and scale that has been undertaken by this Government. I am happy to report to this House, on the basis of data gathered from the participating financial institutions, our preliminary conclusions. Debt waiver has been granted for a sum of Rs.50,254 crores. Debt relief has been granted for a sum of Rs.16,223 crores. Thus, the total amount of debt waiver and debt relief is Rs. 66,477 crore. Among the beneficiaries, the number of small and marginal farmers is 2,98,05,305 and the number of other farmers is 65,81,818; thus the total number of beneficiaries is 3,63,87,123. Honourable Members will kindly note that I have more than fulfilled the promise made by our Government to this House.

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So much has already been said about civil nuclear cooperation.  I do not think it is necessary to go over the technical or the legal aspects once again. Let me emphasise that we have not one but three agreements on civil nuclear cooperation. We have entered into an agreement with the United States on July 20, 2007; with France on January 25, 2008 and with Russia on February 11, 2008.

India has been barred from nuclear commerce. We cannot access nuclear reactors or nuclear fuel or nuclear technology. If we can end that isolation, we can secure cooperation from the US, France and Russia. It is also possible to secure cooperation from some other countries such as Australia, Canada, China, Japan and the United Kingdom.

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            The US Atomic Energy Act, 1954 prohibits cooperation with any country until certain conditions are fulfilled. This is contained in Section 123. However, Section 123 authorises the President to exempt a proposed agreement for cooperation from any of the requirements.

The Hyde Act was passed in 2006 and became law in December, 2006. President Bush issued a signed statement asserting that he would not follow portions of the Act that intruded upon his plenary constitutional prerogatives and would treat certain sections as advisory.

The practice of issuing signed statements is constitutionally sound and well established in the United States.

The 123 Agreement between India and the US was agreed on August 1, 2007. 

In the United States they have understood the Hyde Act and the 123 Agreement in the following manner.

As far as the White House is concerned, the 123 Agreement is consistent with the Hyde Act, when properly construed, and merely fleshes out the details of the US India nuclear cooperation. According to them, the proper legal position is that the 123 Agreement builds upon the Hyde Act. Moreover, once Congress approves the 123 Agreement, then the Agreement will delineate the specific rights and responsibilities of the US and India as the prevailing law that governs and controls the deal's implementation.

How do we understand it in India?

Article 2.2 of the 123 Agreement specifically states that it is an agreement "to enable full civil nuclear energy cooperation between the Parties."  It contemplates such cooperation on "an industrial or commercial scale." Under Article 16, the agreement shall enter into force on a date on which the Parties exchange diplomatic notes informing each other that they have completed all applicable requirements. The legal status of the 123 Agreement is that it has not yet entered into force and, even after it comes into force, India and the United States would have to enter into further agreements to fulfil the objectives on an industrial or a commercial scale. Therefore, the 123 Agreement is an enabling agreement and no more. "Operationalising" the 123 Agreement would mean that the Parties would have to complete all pre-requirements, exchange diplomatic notes and agree upon the date on which the 123 Agreement would come into force. Even after it comes into force, there is nothing automatic, and it would be necessary to enter into further agreements.

We have to apply the principles of international law and the principles of interpretation of statutes. Article 16.4 of the 123 Agreement states that the "Agreement shall be implemented in good faith and in accordance with the principles of international law." Under customary international law as well as the Vienna Convention on the Law of Treaties, 1969, a party may not invoke the provisions of its internal law as justification for its failure to perform a treaty. When the 123 Agreement is voted "up" by the US Congress - that is, ratified by the US Congress - it will be the last expression of the legislature on the subject and will prevail over any earlier domestic law.  Besides, under Article VI(2) of the US Constitution, all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land.  In any view of the matter, the Hyde Act, which is a domestic law, cannot bind India and cannot interfere with the implementation of the 123 Agreement which, when ratified by the US Congress, will be a bilateral treaty between two sovereign countries.

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            The UPA Left Committee held nine meetings between September 11, 2007 and June 6, 2008.

            At the fourth meeting on October 9, 2007, CPI(M)'s member noted that the Left Parties were not opposed to a Safeguards Agreement in principle, just as they had not been opposed to the Separation Plan. Their objection continued to be to the India-US 123 Agreement and the Hyde Act.

            This issue was discussed at the fifth meeting on October 22, 2007 and the sixth meeting on November 16, 2007. At the sixth meeting, it was decided that the impact of the provisions of the Hyde Act and the 123 Agreement on the IAEA Safeguards Agreement would have to be examined and since this would require talks with the IAEA Secretariat for working out the text of an India-specific Safeguards Agreement, the Government would proceed with the talks and the outcome would be presented to the Committee for its consideration before it finalised its findings.

The next three meetings were held on March 17, 2008, May 6, 2008 and June 25, 2008. Members of the Committee were provided with confidential briefing notes that explained the gist of the Agreement and responses were provided to specific queries raised by the Left Parties.

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Let me read excerpts from the Prime Minister Shri A.B. Vajpayee['s statement at UNGA on September 24, 1998

            After referring to the nuclear tests conducted in May, 1998, the PM said:

 

"These tests do not signal a dilution of India's commitment to the pursuit of global nuclear disarmament. Accordingly, after concluding this limited testing programme, India announced a voluntary moratorium on further under ground nuclear test explosions. We conveyed our willingness to move towards a de jure formalisation of this obligation. In announcing a moratorium, India has already accepted the basic obligation of the CTBT.

India ……… is now engaged in discussions with key interlocutors on a range of issues, including the CTBT. We are prepared to bring these discussions to a successful conclusion, so that the entry into force of the CTBT is not delayed beyond September, 1999.

Then, Prime Minister Shri Vajpayee made a statement in Parliament on December 15, 1998 and said

"India remains committed to converting our voluntary moratorium into a de jure obligation. 

"The House will be reassured that in the assessment of our scientists, this stand does not come in the way of our taking such steps as may be found necessary in future to safeguard our national security. It also does not constrain us from continuing with our R&D programmes, nor does it jeopardize in any manner the safety and effectiveness of our nuclear deterrent in the years to come.

"In addition to the talks between Shri Jaswant Singh and Mr. Strobe Talbott, we have had detailed exchanges with France and Russia. Discussions have also taken place with UK and China at the level of Shri Jaswant Singh and at official level with Germany and Japan as well as with other non-nuclear weapon States. I have been in regular correspondence with President Clinton……… President Clinton has also expressed to me his desire for a broad based relationship with India that befits the two largest democracies of the world. I have fully reciprocated the sentiments. Indeed, our ongoing dialogue with the United States is geared towards that end. I am confident this House will want to wish it all success." 

All that our Government has done is to take the process forward and conclude an agreement with the United States.

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            Let me refer to China. I do not envy China, I wish to emulate China. Most of China's electricity is produced from fossil fuels. About 80 per cent is from fossil fuels, mainly coal and about 18 per cent is hydro power. China's nuclear power contributes only 2 per cent.

            China has 11 nuclear power reactors in commercial operation, six under construction, and several more about to start construction. Additional reactors are planned. The goal is to increase capacity to at least 50,000 MWs by 2020 and then a further three to four fold increase to 120,000 to 160,000 MW by 2030. A country with barely 2 per cent of its electricity coming from nuclear power wishes to increase its capacity to generate nuclear power. Why should not India do the same?

            China began building nuclear power plants in 1970 and the industry has now moved to a steady development phase. Technology has been drawn from France, Canada and Russia, with local development based largely on the French element. The latest technology acquisition has been from the USA and France.

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Do we want to end our nuclear isolation or not?

The BJP and the NDA seem to agree that we should end our nuclear isolation. No one is clear about the stand of the Left Parties on this matter. Yet the two groups are voting together against this Motion of Confidence. The NDA has no problem with a strategic relationship with the US. The Left Parties are ideologically opposed to any partnership - strategic or otherwise - with the US. Yet the two groups are voting together against this Motion of Confidence. The NDA believes in India becoming a nuclear weapon State. The Left Parties are opposed to nuclear weapons and nuclear weaponization. Yet the two groups are voting together against this Motion of Confidence. The NDA says that if it comes to power - God forbid - it will renegotiate the agreement. The Left Parties say that they will do everything possible to scuttle the agreement, now and forever. Yet the two groups are voting together against this Motion of Confidence.

I doubt if the Parliament of India has seen anything more bizarre.

The UPA Government and Dr. Manmohan Singh will end India's nuclear isolation."

BSC/GN-189/08