Budget exceedingly good, a job well done: PM

Hopes for a 7.5 percent growth, pays tribute to the "resilience of economy"

PTI | February 26, 2010



Terming as "exceedingly good", Prime Minister Manmohan Singh on Friday said the Budget would help the economy to return to nine per cent growth while allaying the fears that it would fuel "inflationary" expectation.

"A job well done" was how Singh summarised Finance Minister Pranab Mukherjee's Union Budget for 2010-11, presented in Parliament.

"You must look at the total picture emerging from the budget. The net revenue gain for the Finance Minister is only Rs 20,000 crore. In an economy as large as India, this resource mobilisation effort and balance should not trigger any inflationary expectation. At the same time it gives the muscle needed.

"The Finance Minister has not called back to the pre stimulus excise duty rate. He has still exercised moderation signalling the economy that you cannot have all things together," said Singh, who in the 90s had donned the mantle of Finance Minister in the Narasimha Rao government.

Defending Mukherjee's proposal to hike the basic duty on crude and petroleum products besides effecting a one-rupee per litre increase on petrol and diesel, Singh said, "the economy has the capacity to absorb this order of adjustments in excise duties and customs duties without generating a wholesale inflationary spiral."

"Well, I think Finance Minister has mentioned these duties were reduced during a period when petroleum prices had gone up to USD 112 per barrel. Now petroleum prices are much lower..," the Prime Minister said.

On the postponement of the Direct Tax Code (DTC), he maintained that "on the whole" it does not present a problem.

"....Simplification on DTC must be source of strengthening the growth impulses, but the DTC, which was circulated has, I think, generated certain apprehensions in the business community...," he said.

The Prime Minister also assured DTC will not be imposed till "all the apprehensions that have been expressed by the business community are taken care of."

On the introduction of the Goods and Services Tax, Singh said it requires a consensus and all states have to be on board for it to be implemented.

"I think we cannot move the reform of having a GST. I sincerely believe we cannot move very far in the direction of having a GST... Sincerely hope, that during this year we will work towards all these concerns," Singh said.

The Prime Minister said despite a negative agricultural growth, the economy will this year grow by at least 7.2 per cent.

"In my view, it will grow 7.5 per cent. That is a tribute to the resilience of the economy, to the manufacturing sector, revival of export momentum," he said.

He asserted that as far as agriculture was concerned, the Finance Minister has zeroed in on a four-fold strategy of doing everything possible that can be done to increase productivity.

On fiscal deficit, he said, the Finance Minister has committed the government will cap the fiscal deficit at the Centre and states at 68 per cent by 2014-15.

"This is the recommendation of the Finance Commission. We are endorsing the roadmap that has been taken into account by the Finance Commission in presenting its report," he added.

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