NEW DELHI: With a focus on rural development and the common Indian, Finance Minister Pranab Mukherjee presented the union budget for the year 2009-10 in Parliament on Monday. It is the Congress-led United Progressive Alliance (UPA) government’s first budget following its return to power and the first presented by Mukherjee in 25 years. The new budget has hiked allocations for National Rural Employment Guarantee Act (NREGA) by 146 percent to Rs.391 billion. Highlights of this budget focusing on common Indian include: Pilot projects in 115 districts by converging NREGA with other schemes, increase in India’s development — Bharat Nirman — by 45 percent and allocation of Rs.20 billion for rural housing fund under National Housing Bank. Besides, the government aims to make National Rural Livelihood Mission (NRLM) more universal, more focused and time bound for poverty alleviation by 2014.
The budget also contains populist measures such as an increase in the tax exemption limit for senior citizens from Rs.225,000 to 240,000, for women from Rs.180,000 to Rs.190,000 while for all others from Rs.150,000 to Rs.160,000. To reach out to the poorest of poor, the budget allocates one billion rupees for integrated development of 1,000 villages having scheduled caste population of 50 percent or more.
“I have taken the tremendous risk to create fiscal space of having higher deficit. I could have gone for the more conservative way of reducing deficit and spent myself with six or less than that percentage of growth,” Mukherjee told a news channel after presenting the budget. The deficit is still manageable, Mukherjee gave the assurance. He pointed to India’s fiscal deficit — 6.8 percent — being much better compared to that of United States and Britain. “My priority is to come back to path of high growth rate,” Mukherjee said. Though confident, Mukherjee restrained from being over-optimistic by saying: “The turnaround in the economy will be visible only by third quarter of this fiscal, but that also if there’s a visibly change in the international scenario, otherwise it may take a bit longer.”
Complimenting Mukherjee for his “commendable job,” Prime Minister Manmohan Singh said: “Overall the strategy of the budget is to ensure that our economy recaptures the rhythm of accelerated growth process. Simultaneously it seeks to honor in large measure, the commitments that we have made to our people to work steadfastly for the well being of the common Indian.” On the growth rate, Singh told media: “Seven percent growth rate this year is an achievable growth target.”