External Affairs Minister Pranab Mukherjee who is currently holding the charge of Finance Ministry is presenting the UPA’s interim budget. While presenting the budget, the Minister said that the challenges remain in the areas of "capital inflows and inflation". “We have weathered the crisis, but there is no room for complacency,” he said.
The quick highlights of the budget include:
Outlook 2008-09
Tax rates must fall during times of crisis
To relax FRBM targets
Needs new commitments towards downturn security
Have relaxed fiscal responsibility & budget management targets
May need to consider additional fiscal stimulus packages for the next regular budget
Employment schemes need to be expanded
Economy regulatory & oversight systems needs to be more efficient
IIFCL to refinance 60% of the project
Outlay for education up 900% in 11th Five year plan
Global situation not encouraging
Export rate for the first nine months of this fiscal has fallen to 17.1%
FY 08 capital inflow at 9 pc of GDP
54 infra projects cleared under PPP projects with an investment of RS 67,700 crore
IIFCL can raise Rs 10,000 crore; nod for additional Rs 30,000 crore
FDI inflow of $23.3 bn between April and Nov 08
Three PSU banks may get Rs 2,150 cr in interim budget
To provide interest subsidies to farmers in FY 10
15 point programme for the welfare of minorities set up
Rs 65,300 crore in loans waived for farmers in FY 08-09
109 maiden vessels sanctioned for customs deptt
Food subsidy revised to Rs 10960 crore
Estimates
FY 09 plan expenditure revised to Rs 2.8 lakh crore
FY 09 revised estimate of tax collection at Rs 6.28 lakh crore
FY 09 fiscal deficit seen at 6% of GDP
Revised estimates of spending gone up from Rs 7.5 lakh crore to 9.9 lakh crore
FY09 revenue deficit of 4% of GDP vs EST of 1%
Stimulus
To Recapitalise 3 PSU's to ensure credit growth
54 infra projects cleared under PPP projects with an investment of Rs 67,700 crore
Infra investmnents to be raised to 9 pc of GDP by 2014
Rs 40,900 crore for Bharat Nirman Scheme
Rural jobs to get Rs 30,100 crore
JNNURM spending seen at Rs 11,842 crore
Budget planned spending may have to be upped substantially post polls
Interest subvention for export loans extended
FY10 budget revenue deficit seen at 4% , Fiscal deficit at 5.5%
Mid day meal scheme to get Rs 8000 crore
Rs 6705 crore in child development schemes
Achievements
The GDP went from 7.5% in 04-05 to 9.7% in 06-07 and clocked 9% in 08
Per capita income increased 7.4% per annum during the UPA govt's tenure
Domestic investment rate at 39% in FY 08
Turnover of PSU enterprises has grown by 80% and profits have increased by 72%.
Contribution to exchequer has recorded an increase of 86%
Loss making enterprises has come to 55 from 73
Asserting that the Indian economy would grow at 7.1 per cent in 2009, Mukherjee said a right mix of policies would help bail the country out from difficult times.
India’s economy has slipped from a growth rate of about nine per cent in the past three years, but still looks healthy compared with most developed economies, many of which are in recession. “Indian economy growing at a rate of 7.1% makes India still the second largest growing economy in the world,” said Mukherjee.
Faced with faltering growth, the Government had announced two stimulus packages, including extra spending of four billion dollars, while for its part the central bank has cut its key-lending rate by 350 basis points since October to 5.50 per cent.
The Government has also unveiled plans to borrow 460 billion rupees by the end of the fiscal year in March to fund its stimulus measures and meet extra spending needs.
There has not been much activity seen on the bourses, post the announcement of the interim budget.
