Chidambaram hails budget, says will boost economy

Union Home Minister P Chidambaram today hailed the General Budget for 2009-10 presented by Finance Minister Pranab Mukherjee, saying it would boost the economy.

Mr Chidambaram was the Finance Minister in the previous tenure of the Congress-led United Progressive Alliance (UPA) government before he was shifted to the Home Ministry in November last year in the wake of the terror attacks on Mumbai.

“The Budget for 2009-10 has been prepared with great skill and wisdom with the objective of stimulating the economy and returning to the high growth path. The total size of the three stimulus packages provided in 2008-09 is estimated at Rs.1,86,000 crore. The biggest stimulus in the Budget for 2009-10 is the Plan Expenditure of Rs.3,25,149 crore and the Gross Budgetary Support of Rs.2,39,840 crore for the Central Plan. It is hoped that this, together with other measures announced by the Finance Minister, will give a boost to the economy," he said in a statement.

According to Mr Chidambaram, the big take-aways from the budget was the primacy accorded to infrastructure, including Jawaharlal Nehru National Urban Renewal Mission (JNNURM), Accelerated Power Development and Reform Programme (APDRP), National Highways Development Programme (NHDP), Railways, Accelerated Irrigation Benefit Programme (AIBP) and new means of financing by India Infrastructure Finance Company Limited (IIFCL).

He said the reaffirmation of fiscal responsibility and fiscal prudence and the promise to return to the Fiscal Responsibility and Budget Management (FRBM) targets as early as possible was also important.

He said the Rs.39,100 crore for National Rural Employment Guarantee Scheme(NREGS), Rs.12,000 crore for Pradhan Mantri Gram Sadak Yojana (PMGSY) and Rs.8,800 crore for Indira Awas Yojana (IAY), all time tested and successful programmes to promote inclusive growth, were significant.

Other budget provisions that he felt were significant were the expansion of agricultural credit with a target of Rs.3,25,000 crore, a two per cent interest subvention and an additional one per cent back-ended subvention to farmers who repay their loans on schedule, the introduction of the draft Direct Taxes Code together with a discussion paper within 45 days, the reaffirmation of the intent to introduce Goods and Service Tax (GST) with effect from April 1, 2010 and maintaining stability in tax rates for personal income tax and corporate tax.

He said the budget speech contained several innovative ideas including switching over to nutrient-based fertilizer subsidy and moving towards a system where the subsidy is paid directly to the farmer, introducing the National Food Security Act, the Prime Minister’s Adarsh Gram Yojna for villages with a majority population of SC/ST, interest subsidy for educational loans taken by students belonging to economically weaker sections, 100,000 houses for Central Para-Military Force personnel through innovative financing, expansion of the New Pension System (NPS) through fiscal support, including tax exemptions, to the NPS Trust and increasing the non-promoter public shareholding in all listed companies, both in the public and private sectors.

"I am confident that the Budget will be appreciated by all sections of the people," Mr Chidambaram added.

NNN