New Delhi: India’s Budget for the fiscal year to March takes forward the stimulus packages initiated in December in the wake of the global downturn, but also looks at bridging the economy’s short-term needs with the government’s medium-term social sector goals, Prime Minister Manmohan Singh said in an interview to Doordarshan. Edited excerpts:
To what extent does this Budget fulfil election promises and what will it do for the common man?
The focus of the Budget is to ensure that the short-term requirements of the economy are reconciled with the medium-term goals of our social and economic policies. Right now, the major concern is to minimize the impact of the international recession on the Indian economy. And for that, it is necessary to provide stimulus to our economy. That process began in December last year. This Budget carries that process further.
Road map: Manmohan Singh says it is important for the government to reaffirm its commitment to introducing a goods and services tax by ’10. Ramesh Pathania / Mint
At the same time, there are medium-term concerns that the growth momentum of the economy must be restored notwithstanding the decline in the international demand for our exports. The road to do that is to strengthen infrastructure investment, both in the public sector and in the private sector, through the PPP (public-private partnership) route.
The Budget does that admirably well. And then, simultaneously, it also seeks to carry forward the process of inclusive growth; its expenditure programmes take care of our major flagship programmes— Bharat Nirman, National Rural Employment Guarantee Act (NREGA), the (Jawaharlal Nehru National) Urban Renewal Mission, the (National) Rural Health Mission. So, I believe the finance minister has done an admirable job.
What will this do for people in rural areas?
It is essentially a rural development-oriented Budget. A record increase in allocation for national rural employment guarantee fund, increased money for irrigation benefit schemes, the Bharat Nirman programme, which seeks to upgrade and modernize rural infrastructure. These are all programmes which will primarily benefit our rural areas and reduce the gap between Bharat and India.
At the same time, there is new urban emphasis. The urban development scheme has a huge increase of 86%.
The urban mission focuses on the infrastructure needs of our cities. We have identified 60 cities. Probably, we need to relook at the number in due course of time. Simultaneously, the emphasis on basic amenities for the poorer section, the slum-free India commitment, is also taken into account.
Any outlay on food security?
Well, it is too early because the whole (Food Security) Act has to be put in place. As the finance minister mentioned, we will soon come out with a draft that will be put (up) on the website.
What is it you view on state subsidy on food grains?
If we go by the number of people who the Planning Commission records as people below the poverty line, I think the outlay on the Centre, even if we provide grains at Rs3 (per kg), additional outlay is within the limits of practical politics. But if we go by the much larger figure of people below the poverty line which are floating around, I think then there will be some problem. We will sort out these problems.
Any targets for disinvestment in public sector enterprises?
I haven’t done any detailed calculation. The finance minister has committed our government to increased disinvestment while maintaining the public sector character of public enterprises. Much depends upon the evolving economic situation, the state of the stock markets.
Any deadline to get back to fiscal responsibility and budget management targets?
This is a matter which the government has also referred to the (13th) Finance Commission for advice. The Finance Commission will be reporting in October. Unless we take into account the recommendations of the Finance Commission, anything by way of new deadlines of what we achieve will be counterproductive. So, once the Finance Commission’s report is available, once the devolution pattern that they recommend is known for the next five years, it is only then that you can make credible guesses and work out credible strategies...how to handle the problem of fiscal deficit.
Is a goods and services tax possible by April 2010?
It is important that the government should reaffirm its commitment. If in the process of implementation there are some difficulties, they could be taken care of.
What about the security aspect?
Security forces need our understanding and support. We will do all that is necessary to modernize the security and intelligence services.
—Interview to Doordarshan