NEW DELHI, 1 March 2008 — Prime Minister Manmohan Singh unveiled the last full-fledged budget (2008-09) before the general elections, which was presented yesterday by Finance Minister P. Chidambaram in the Lok Sabha. It is being hailed as pro-agriculture and pro-investment.

The measures announced, which include the waiver of the farm loan, would address problems of the farm sector and lead to overall development of the economy, Manmohan told media persons outside the Parliament after the budget was presented.

Describing the agricultural loan waiver as a “very unorthodox response” to address problems faced farmers who are the “biggest businessmen” of the country, Manmohan said: “Considering the amount of depression that prevails in the agriculture sector, this is the response mechanism (farm loan waiver) that is fully justified.”

United Progressive Alliance (UPA) Chairperson and Congress President Sonia Gandhi hailed the waiver of farmers’ loan as a “revolutionary step.” While addressing a large gathering of farmers, who reached her residence as soon as the relief was announced, Sonia said: “Today is a very happy occasion. The waiver of loans on farmers by the UPA government is a revolutionary step.”

Chidambaram announced a waiver of Rs.600 billion of agricultural loans, under which all loans up to March 2007 and those overdue up to December last will be covered. The step has been taken in view of country facing problem of farmers’ suicides on account of indebtedness. Small and marginal farmers will benefit from this measure.

The budget also includes an increase in allocation schemes for minorities to Rs.10 billion from Rs.5 billion.

“A multi-sectoral development plan for each of the 90 minority concentration districts will be drawn up at a cost of RS3.78 billion,” Chidambaram said. “The allocation in 2008-09 will be Rs.5.4 billion,” he said. While Rs.800 million would be allocated for scholarship, Rs.454.5 million would be provided for modernizing madrasa education in current year, he said.

With the budget allocation for her ministry being Rs.7.2 billion, Women and Child Development Minister Renuka Chowdhury said: “This is gender sensitive, gender oriented budget. We have got 24 percent increase in the budget.”

Other highlights include a 10 percent increase in defense budget, from Rs.950 billion to Rs.1.5 billion in 2008-09. There is a 20-percent hike in the education budget. More centers of higher education are to be opened, including institutes of information technology in Andhra Pradesh, Bihar and Rajasthan.

Criticizing the budget as UPA’s election manifesto, Bharatiya Janata Party (BJP) Vice President Mukhtar Abbas Naqvi said: “It is clear signal that elections are being held early.

The nature of the budget is virtual declaration of mid-term elections.” After having remained silent for five years as farmers continued to die, now the government’s “sensitivity has been triggered in the wake of early elections,” BJP spokesman Prakash Javadekar said.

Terming the budget as an “election stunt,” Communist Party of India (CPI) leader Gurudas Dasgupta said: “The only thing the finance minister did not announce was the election date.”

While left bloc leaders welcomed the loan waiver, they pointed out that these would affect only one-third of farmers who have taken loans from national banks, cooperatives or other government institutions. The government should have reduced the four percent rate of interest on loans to farmer, CPI secretary D. Raja said.

“The budget contains nothing at all to contain inflation,” which is “most burning issue today,” Communist Party of India-Marxist (CPI-M) leader Sitaram Yechury said. Besides, the increase in education, healthcare and other social sectors fall far short of what was required or promised in the Common Minimum Program, Yechury said.