Right at the start, finance minister P. Chidambaram clearly outlined that the government views 2008-09 as the year of “consolidation”.
The focus on further consolidation of the themes that have defined this government’s policies so far, namely, thrust on inclusive growth, moderation of tax rates and adherence to fiscal discipline should, therefore, come as no surprise.
Kumar Mangalam Birla
The accent is distinctly on social sectors and measures to alleviate the lot of those still mired in poverty. This is sought to be done through a range of initiatives such as health insurance cover for workers in the unorganized sector, old-age pension schemes and housing for the poor.
Stepping up programmes aimed at honing the skills of our people will also stand us in good stead as we strive to cash in on India’s demographic dividend in the years ahead. Monitoring of the Central Plan schemes indicates the seriousness with which the government seeks to translate outlays into outcomes.
Performance accountability and implementation must be given greater emphasis if we are to progress.
Customs and excise duty rates continue to trend downwards. These changes, coupled with the relaxation of personal income-tax rates and other measures to boost rural incomes, would stoke consumer demand.
The minister has justifiably left the peak rate of customs duty unchanged, given the challenge posed by the appreciation of the rupee.
On the fiscal front, the government has exceeded its targets, reining in the fiscal deficit to just 2.5% of GDP. This is a significant achievement, particularly when viewed in the context of the government’s expenditure priorities and global inflationary pressures. While many eyebrows will be raised on the Rs60,000 crore farm waiver, we must take cognizance of the fact that the condition of farmers in large tracts of India’s interiors is worrisome. It is a genuine human issue. Therefore, it should come as no surprise that the FM chose compassion vis-à-vis unbridled economics.
Kumar Mangalam Birla is chairman of Aditya Birla Group.
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