REFORMS, CORE TO TOP BUDGET
The Economic Times, May 28, 2009, Page 1
Armed with a decisive mandate, Team Manmohan is eager to rev up the economy. So even as the FM vowed to push for cheaper funds & higher infrastructure spending, Sebi said it was looking to ease fund-raising norms for core companies. It was enough to charge up the bulls on Dalal Street...
Our Bureau NEW DELHI
THE full Budget for 2009-10 to be presented in the first week of July would have welfare measures for the poor, concrete reform moves, higher infrastructure spending and steps to boost the economy, said finance minister Pranab Mukherjee on Wednesday. The Budget would also kickstart fiscal consolidation to be achieved over a three-year period.
Mr Mukherjee, in his first press conference after assuming office, said the government would present its vision and approach for the next five years in the Budget. Separately, the government will get commitments from banks to lower the cost of funds.
“Broadly, the election results have vin
dicated the strategy of inclusive growth. I have no hesitation in saying that along with reviving the momentum of growth and employment generation, our government will strengthen the various ‘inclusive’ elements in the coming Budget,” said Mr Mukherjee. The Congress party’s manifesto promises to expand the schemes on creating rural jobs, providing education and health insurance cover, besides legally guaranteeing food to the poor.
The minister said budget-making was underway in full swing and that it would be presented it in the first week of July.
The government has to continue with a higher spending this fiscal too in order to restore the higher economic growth rate in the past, the 73-year-old political veteran said.
“Let me say unambiguously that we are committed to restoring growth and employment and that would not have been possible without increased spending funded by incremental borrowing. This would need to be further continued in 2009-10, the current year,” Mr Mukherjee said.
The government, which earlier announced three economic stimuli, will provide sustained push to growth through the next round of economic reforms.
FM to push banks to make funds cheaper
“WE have a broad plan of action in mind. I will get additional inputs when I have my pre-Budget consultations with stakeholders. All this will be distilled into a concrete short-term and medium-term vision and strategy for India’s economic growth,” assured Mr Mukherjee.Finance secretary Ashok Chawla, who accompanied the minister, later explained to reporters that the slowdown in growth has “bottomed out” and a recovery was imminent. Four lead economic indicators suggest the economy was set to grow faster, he said. Besides, foreign institutional investments into the country have picked up, with the total inflow in the last 45-50 days touching about $4 billion, said Mr Chawla.
Mr Mukherjee also said the government was concerned about the cost and the speed at which finance can be accessed by businesses. He said he would meet bankers and get them “committed to a more benign plan of action”. The government will also give special attention to strengthening infrastructure investments. It will re-appraise infrastructure projects in the pipeline and make them more robust. The Centre would also calibrate policies to boost infrastructure spending so that the economy returns to the high-growth trajectory.
Despite the higher spending, the government is equally committed to fiscal consolidation over a period of, say, 2-3 years, the minister added. In the interim budget presented in February, the government had estimated that fiscal deficit for 2008-09 may touch 6% of gross domestic product (GDP) and it forecast a 5.5% fiscal deficit for this year. Economists said the combined fiscal deficit of the Centre and the states may have crossed 10% of national GDP last fiscal. “Prophets of doom have been unduly focusing on increased public spending and consequent increase in the fiscal and revenue deficits in the past. We are hopeful that an early return to our recent growth performance will help us come back to our preferred path of fiscal prudence,” said the minister. The government had originally set a fiscal deficit target of 2.5% for the last fiscal. Mr Mukherjee said the government will take advantage of its political stability and push long-pending reforms. These measures would cover both financial and non-financial sectors of the economy. One of the immediate steps would be to implement the law against money laundering, he said.
The Economic Times, May 28, 2009, Page 1
Armed with a decisive mandate, Team Manmohan is eager to rev up the economy. So even as the FM vowed to push for cheaper funds & higher infrastructure spending, Sebi said it was looking to ease fund-raising norms for core companies. It was enough to charge up the bulls on Dalal Street...
Our Bureau NEW DELHI
THE full Budget for 2009-10 to be presented in the first week of July would have welfare measures for the poor, concrete reform moves, higher infrastructure spending and steps to boost the economy, said finance minister Pranab Mukherjee on Wednesday. The Budget would also kickstart fiscal consolidation to be achieved over a three-year period.
Mr Mukherjee, in his first press conference after assuming office, said the government would present its vision and approach for the next five years in the Budget. Separately, the government will get commitments from banks to lower the cost of funds.
“Broadly, the election results have vin
dicated the strategy of inclusive growth. I have no hesitation in saying that along with reviving the momentum of growth and employment generation, our government will strengthen the various ‘inclusive’ elements in the coming Budget,” said Mr Mukherjee. The Congress party’s manifesto promises to expand the schemes on creating rural jobs, providing education and health insurance cover, besides legally guaranteeing food to the poor.The minister said budget-making was underway in full swing and that it would be presented it in the first week of July.
The government has to continue with a higher spending this fiscal too in order to restore the higher economic growth rate in the past, the 73-year-old political veteran said.
“Let me say unambiguously that we are committed to restoring growth and employment and that would not have been possible without increased spending funded by incremental borrowing. This would need to be further continued in 2009-10, the current year,” Mr Mukherjee said.
The government, which earlier announced three economic stimuli, will provide sustained push to growth through the next round of economic reforms.
FM to push banks to make funds cheaper
“WE have a broad plan of action in mind. I will get additional inputs when I have my pre-Budget consultations with stakeholders. All this will be distilled into a concrete short-term and medium-term vision and strategy for India’s economic growth,” assured Mr Mukherjee.Finance secretary Ashok Chawla, who accompanied the minister, later explained to reporters that the slowdown in growth has “bottomed out” and a recovery was imminent. Four lead economic indicators suggest the economy was set to grow faster, he said. Besides, foreign institutional investments into the country have picked up, with the total inflow in the last 45-50 days touching about $4 billion, said Mr Chawla.
Mr Mukherjee also said the government was concerned about the cost and the speed at which finance can be accessed by businesses. He said he would meet bankers and get them “committed to a more benign plan of action”. The government will also give special attention to strengthening infrastructure investments. It will re-appraise infrastructure projects in the pipeline and make them more robust. The Centre would also calibrate policies to boost infrastructure spending so that the economy returns to the high-growth trajectory.
Despite the higher spending, the government is equally committed to fiscal consolidation over a period of, say, 2-3 years, the minister added. In the interim budget presented in February, the government had estimated that fiscal deficit for 2008-09 may touch 6% of gross domestic product (GDP) and it forecast a 5.5% fiscal deficit for this year. Economists said the combined fiscal deficit of the Centre and the states may have crossed 10% of national GDP last fiscal. “Prophets of doom have been unduly focusing on increased public spending and consequent increase in the fiscal and revenue deficits in the past. We are hopeful that an early return to our recent growth performance will help us come back to our preferred path of fiscal prudence,” said the minister. The government had originally set a fiscal deficit target of 2.5% for the last fiscal. Mr Mukherjee said the government will take advantage of its political stability and push long-pending reforms. These measures would cover both financial and non-financial sectors of the economy. One of the immediate steps would be to implement the law against money laundering, he said.
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