The Union Budget this year has aimed to focus on inclusive growth and insuring food security. These concerns for aam aadami have gone hand in hand with credible measures for improving investment climate, strengthening infrastructure and fiscal consolidation. As the country looks to ‘quickly revert to high GDP growth path’ in the wake of ‘uncertain times’, concerns for inclusive growth targeting the disadvantaged sections form the defining features of the Budget.
Many new initiatives have been introduced for sustained and inclusive growth. These include setting up of Mahila Kisan Sashaktikaran Pariyojana, Financial Stability and Development Council, Gold Regulatory Authority, Technical Advisory Group for Unique Projects, National Mission for Delivery of Justice and Legal Reforms, Independent Evaluation Office and National Clean Energy Fund,
Mr Pranab Mukherjee Finance Minster of India in his budget speech in Parliament said that three challenges would continue to engage the Indian policy planners for next few years. The first challenge is to quickly revert to the high GDP growth path of 9 per cent and then find the means to cross the double digit growth barrier. The second challenge is to consolidate recent gains in making development more inclusive. The third challenge is to remove weaknesses at different levels of governance and to improve public delivery mechanism. The Budget, therefore, focuses on fiscal consolidation, making growth more broad-based and ensuring that supply-demand imbalances are better managed.
The Minister expressed the hope that the economy will reach 10% growth in not too distant a future. The Minister explained that after a fall in GDP growth in 2008-09 to 6.7%, the growth has built up and 7.2% growth is expected in 2009-10. The Minister said that the recovery is very encouraging as it has come about despite negative growth in agriculture sector. The growth rate in manufacturing in December 2009 was 18.5%, the highest in past two decades. Similarly, there are also signs of a turnaround in the merchandise exports with a positive growth in November and December 2009 after a decline in about twelve successive months.
IMPROVING INVESTMENT ENVIRONMENT
The Finance Minister said that a number of steps have been taken to simplify the Foreign Direct Investment regime. The government also intends to make the FDI policy user-friendly by consolidating all prior regulations and guidelines into one comprehensive document. This would enhance clarity and predictability of our FDI policy to foreign investors, he said.
With a view to strengthen and institutionalize the mechanism for maintaining financial stability, Government has decided to set up an apex-level Financial Stability and Development Council. It would monitor macro prudential supervision of the economy, including the functioning of large financial conglomerates.
INFRASTRUCTURE
The Budget provides INR 173,552 crore for infrastructure, accounting for over 46 per cent of the total Plan allocation.
The allocation for road transport is being increased by over 13% from INR 17,520 crore to INR 19,894 crore.
Disbursement for infrastructure by India Infrastructure Finance Company Ltd is expected to reach INR 20,000 crore in 2010-11 as against INR 9,000 crore this year. Refinancing of bank landing to infrastructure projects by IIFCL is expected to be more than double in 2010-11.
ENERGY
The Plan allocation for power sector is being more than doubled from INR 2,230 crore in 2009-10 to INR 5,130 crore in 2010-11.
A Coal Regulatory Authority is proposed to be set up for creating level playing field in the coal sector and resolving various issues.
Source : Steelguru