New Delhi: Finance minister Pranab Mukherjee announced on Monday a food security bill for 2011-12, a measure that would provide cheap grains for millions of BPL families but probably at the cost of a worrisome huge fiscal expenditure.
It was one of the first signs of populism in the annual budget as Prime Minister Manmohan Singh confronted high prices and corruption scandals as well as elections in five states this year.
In his ongoing budget speech, Mukherjee dismissed fears of policy drift and announced incentives for private investment in infrastructure as well as moves to help agricultural productivity to sustain economic growth and lower inflation.
The minister raised the foreign investment limit in corporate infrastucture bonds by $20 billion. Mukherjee said infrastructure debt funds would be created.
In a pilot move, the minister said some subsidies for food and fuel would be directly given as cash to customers starting in March, a move aimed at making the subsidies system more efficient with less waste.
The government is also expected to withdraw more of the stimulus that helped the country weather the global economic downturn.
Asia’s third-largest economy is on track to grow at 8.6% in the current fiscal year that ends in March. A new government survey has forecast economic growth of about 9% for the next fiscal year.