Fighting job losses, introducing an urban income security scheme and reviving economic growth are the three big issues that Finance Minister Pranab Mukherjee would be addressing in the first budget of the UPA government.
<b1>From disinvestments of public sector companies to liberalisation of financial services, several market-friendly policies may come embedded in Budget 2009-10, likely to be unveiled in the first week of July.
In an interview to Hindustan Times, Mukherjee said he couldn’t comment on the specifics of economic policy changes that the government was planning because he plans to “address them in the budget”.
The minister, however, said that the UPA government’s thrust on agriculture and rural development would continue. Given the success of National Rural Employment Guarantee Scheme, he said, the government would be considering a similar plan for urban areas.
"Job losses are a matter of concern,” Mukherjee said, referring to lay-offs in sectors like textiles, handicrafts and exports — hit hard by the global economic downturn.
“We shall have to create jobs and for that we have to make investments and for that we need money,” he said. “I do hope for making available more resources for development.”
And if in the process — that could include another round of economic stimulus — the country’s fiscal deficit rises, Mukherjee is willing to risk it. Fiscal deficit is the gap between the government’s revenues and expenditure, which bridged through borrowing.
He said there were some signs of recovery for the Indian economy, but it could take several years before it returned to a 9 per cent growth trajectory, from which it slipped last year because of the global downturn.
"I am optimistic, but I do not feel that we will be able to come back to 8.6-9.0 per cent growth in the immediate future,” he said. In 2008-09, the Indian economy is estimated to have grown by 6.5 per cent.
The government will nevertheless strive to boost spending on infrastructure projects, encourage banks to lend more to companies and provide stimulus wherever required.
“I am going to meet the bankers, and I would like to see that they become more cooperative to genuine credit requirements of the industry,” he said.
In Budget 2009-10, Mukherjee may more than make up for the disappointment he had brought to industry while presenting the interim budget in February that conformed to parliamentary propriety and refrained from new measures.