New Delhi: The first budget of the UPA’s second stint in power is aimed at reviving flagging economic growth through a combination of big spending programmes and populist giveaways, doling out at least a bit of largesse to every section, from the rural masses to the urban middle classes. Some critics said the extravagant spending spree risks swelling the public deficit. PM Manmohan Singh countered the argument. “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,” he said in an interview with Doordarshan. Mint looks at some issues, including rural infrastructure spending and food and fertilizer subsidies
Budget 2009 may be the first of a balanced and reformist five-part economic plan the UPA hopes to implement, but it is also a populist and people-oriented Budget that reflects the ruling coalition’s political aspirations
Budget 2009 may be the first of a balanced and reformist five-part economic plan the United Progressive Alliance (UPA) hopes to implement, but it is also a populist and people-oriented Budget that reflects the ruling coalition’s political aspirations.
The focus on “aam aadmi (common man) is continuous and enhanced,” said Congress spokesman Abhishek Manu Singhvi. “The Budget is progressive, inclusive and growth-oriented.”
Buoyed by the success of its farm loan waiver scheme—one of the key reasons behind the victory of the UPA in the 15th general election—the government decided to extend by six months the time given to farmers having more than 2ha of land to pay 75% of their dues.
The Budget also announced the creation of a task force to study the issue of indebtedness among farmers in certain parts of Maharashtra—a state that has seen a significant number of suicides on this account, and also one that goes to the polls later this year.
The National Rural Employment Guarantee Scheme is another programme that helped the UPA come back to power, and the government announced a 144% rise in the funds allocated to Rs39,100 crore.
The populism, however, hasn’t gone down well with everyone. “In a democracy, everything has to be political... Disappointingly, however, what this Budget has done is to go on a spending spree... One can say the Budget is populist, if by that we mean that the easy decisions are taken and the hard ones are not,” said Pratap Bhanu Mehta, political analyst and president, Centre for Policy Research, a New Delhi-based think tank.
Santosh K. Joy contributed to this story.