ID :
45955
Tue, 02/17/2009 - 07:08
Auther :
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http://m.oananews.org//node/45955
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Budget hikes outlay for flagship schemes; no tax changes
New Delhi, Feb 16 (PTI) The Government of India Monday
announced allocation of a massive Rs 1,31,317 crore for its
flagship social sector schemes in the interim budget 2009-10
that had no stimulus sought by the industry, which along with
the stock market reacted negatively.
India's Finance Minister Pranab Mukherjee, who holds
additional charge of finance ministry, presented the interim
budget that makes no changes in direct and indirect taxes, but
for the extension of a two percent interest subvention on pre
and post-shipment credit for certain employment sectors to
support exports hit by the global economic slump.
"The mandate of the government is coming to an end by
May 22-23. Elections are due. I can neither indulge in
reckless borrowing nor go on imposing taxes without the
mandate of Parliament. It will be a wrong thing to do," he
said as the industry called the budget a "big disappointment".
The opposition dubbed the budget as offering "poll
lollipops", with Bharatiya Janata Party (BJP) leader Arun
Jaitley likening the fiscal deficit calculations to the Satyam
fraud. The Congress said it's a remarkable budget, especially
for the common man.
The budget hikes the defence expenditure by 34 percent in
the coming year to Rs 1,41,703 crore from Rs 1,05,600 crore a
year ago in view of the fact that security environment has
deteriorated considerably with the Mumbai terror attacks,
giving an entirely new dimension to cross-border terrorism.
The government side-stepped fiscal and revenue deficit
targets, while making provisions for social, infrastructure
and other sectors, a scenario that would necessitate higher
market borrowings in the face of economic slowdown and fall in
tax revenue.
To manage the revenue deficit of 4 percent and 5.5
percent fiscal deficit during FY'10, the budget provides for
nearly tripling market borrowings to over Rs 3,00,000 crore.
"Extraordinary economic circumstances merit extraordinary
measures. Now is the time for such measures. Our government
decided to relax the Fiscal Responsibility and Budget
Management targets in order to provide the much-needed demand
boost to counter the situation created by the global financial
meltdown," Mukherjee said in his 90-minute speech.
Of the massive spending projected on social sector
schemes that will have an impact on 'Aam Aadmi' (common man),
the Bharat Nirman scheme gets Rs 40,900 crore and the National
Rural Employment Guarantee Scheme Rs 30,100 crore.
The rest of the social sector funds go to Sarva Siksha
Abhiyan (Rs 13,100 crore), Integrated Child Development Scheme
(Rs 6,705 crore), Jawaharlal Nehuru Urban Renewal Scheme (Rs
11,842 crore), National Rural Health Mission (Rs 12,070
crore), Rajiv Gandhi Rural Drinking Water Mission (Rs 7,400
crore) and Total Rural Sanitation Programme (Rs 1,200 crore).
Various social sector schemes show a substantial increase
over the budget allocation for 2008-09, but show marginal
change over the revised estimates.
In view of the fact that conditions in the year ahead are
not likely to be normal, Mukherjee said a fiscal deficit of
5.5 percent of the Gross Domestic Product (GDP) -- Rs 3,32,835
crore -- is inevitable.
"We will return to Fiscal Responsibility Budget
Management targets once the economy is restored to its recent
growth path," Mukherjee said.
The Minister also said while the proposed provisions are
appropriate for a vote-on-account, he would like to point out
that Plan expenditure for 2009-10 may have to be increased
substantially at the time of the presentation of the regular
budget "if we are to give the economy the stimulus it needs to
cope with the global recession that is likely to continue
through the current year.
"In the current environment, there is a clear need for
contra-cyclical policy and it calls for a substantial increase
in expenditure in infrastructure development where we have a
large gap and in rural development where the programmes such
as Bharat Nirman and NREGS are playing a vital role," he said.
Aiming at enhancing expenditure on schemes to provide
employment and lift the economy, the interim Budget for
2009-10 has planned a total expenditure of Rs 953,231 crore
comprising Rs 285,149 crore in plan and Rs 668,082 crore in
non-plan spending.
The revised estimates for tax collections during 2008-09
project a fall of nearly Rs 60,000 crore due to the economic
slowdown. PTI KM
RAI
announced allocation of a massive Rs 1,31,317 crore for its
flagship social sector schemes in the interim budget 2009-10
that had no stimulus sought by the industry, which along with
the stock market reacted negatively.
India's Finance Minister Pranab Mukherjee, who holds
additional charge of finance ministry, presented the interim
budget that makes no changes in direct and indirect taxes, but
for the extension of a two percent interest subvention on pre
and post-shipment credit for certain employment sectors to
support exports hit by the global economic slump.
"The mandate of the government is coming to an end by
May 22-23. Elections are due. I can neither indulge in
reckless borrowing nor go on imposing taxes without the
mandate of Parliament. It will be a wrong thing to do," he
said as the industry called the budget a "big disappointment".
The opposition dubbed the budget as offering "poll
lollipops", with Bharatiya Janata Party (BJP) leader Arun
Jaitley likening the fiscal deficit calculations to the Satyam
fraud. The Congress said it's a remarkable budget, especially
for the common man.
The budget hikes the defence expenditure by 34 percent in
the coming year to Rs 1,41,703 crore from Rs 1,05,600 crore a
year ago in view of the fact that security environment has
deteriorated considerably with the Mumbai terror attacks,
giving an entirely new dimension to cross-border terrorism.
The government side-stepped fiscal and revenue deficit
targets, while making provisions for social, infrastructure
and other sectors, a scenario that would necessitate higher
market borrowings in the face of economic slowdown and fall in
tax revenue.
To manage the revenue deficit of 4 percent and 5.5
percent fiscal deficit during FY'10, the budget provides for
nearly tripling market borrowings to over Rs 3,00,000 crore.
"Extraordinary economic circumstances merit extraordinary
measures. Now is the time for such measures. Our government
decided to relax the Fiscal Responsibility and Budget
Management targets in order to provide the much-needed demand
boost to counter the situation created by the global financial
meltdown," Mukherjee said in his 90-minute speech.
Of the massive spending projected on social sector
schemes that will have an impact on 'Aam Aadmi' (common man),
the Bharat Nirman scheme gets Rs 40,900 crore and the National
Rural Employment Guarantee Scheme Rs 30,100 crore.
The rest of the social sector funds go to Sarva Siksha
Abhiyan (Rs 13,100 crore), Integrated Child Development Scheme
(Rs 6,705 crore), Jawaharlal Nehuru Urban Renewal Scheme (Rs
11,842 crore), National Rural Health Mission (Rs 12,070
crore), Rajiv Gandhi Rural Drinking Water Mission (Rs 7,400
crore) and Total Rural Sanitation Programme (Rs 1,200 crore).
Various social sector schemes show a substantial increase
over the budget allocation for 2008-09, but show marginal
change over the revised estimates.
In view of the fact that conditions in the year ahead are
not likely to be normal, Mukherjee said a fiscal deficit of
5.5 percent of the Gross Domestic Product (GDP) -- Rs 3,32,835
crore -- is inevitable.
"We will return to Fiscal Responsibility Budget
Management targets once the economy is restored to its recent
growth path," Mukherjee said.
The Minister also said while the proposed provisions are
appropriate for a vote-on-account, he would like to point out
that Plan expenditure for 2009-10 may have to be increased
substantially at the time of the presentation of the regular
budget "if we are to give the economy the stimulus it needs to
cope with the global recession that is likely to continue
through the current year.
"In the current environment, there is a clear need for
contra-cyclical policy and it calls for a substantial increase
in expenditure in infrastructure development where we have a
large gap and in rural development where the programmes such
as Bharat Nirman and NREGS are playing a vital role," he said.
Aiming at enhancing expenditure on schemes to provide
employment and lift the economy, the interim Budget for
2009-10 has planned a total expenditure of Rs 953,231 crore
comprising Rs 285,149 crore in plan and Rs 668,082 crore in
non-plan spending.
The revised estimates for tax collections during 2008-09
project a fall of nearly Rs 60,000 crore due to the economic
slowdown. PTI KM
RAI
