The economy having scaled down to a moderate growth of 6.7 per cent in 2008-09 from a high of 9 per cent over the past three years, the finance minister had a difficult job at hand on Budget day. Despite the constraints, he appears to have done a good job in balancing the immediate requirement of maintaining the growth momentum and achieving an inclusive growth agenda.
The finance minister has sought to infuse another booster dose to the economy with increased outlay for infrastructure, rural development and employment generation.
Infrastructure has long been a bottleneck to our growth. Over the years the government has been proactively addressing the issue. Focus on infrastructure in the current budget has more or less come on expected lines.
A significant increase in allocation to Jawaharlal Nehru National Urban Renewal Mission will clearly go a long way in helping improve infrastructure in the cities. As for rural India, Bharat Nirman has been strengthened with a 45 per cent increase in outlay.
Rural development and employment generation have quite rightly received priority. Allocation to the premier employment generation programme has been increased by a whopping 144 per cent. Along with the other rural development programmes, which also have been strengthened quite considerably, NREGA should help sustain rural demand by helping augment incomes.
The government’s continued efforts to make the economic growth more inclusive are most laudable. There has been a subtle attempt in the budget to increase access to quality education, healthcare, and financial system, particularly in the rural areas.
After several rounds of tax cuts to prop up demand through the last 8-10 months, the finance minister was obviously left with very little room to manoeuvre. By continuing with these changes, he has expressed a clear intent to drive growth. By discontinuing with the FBT, he has addressed a long-standing demand from the corporate sector.
One thing that is short of expectation is the lack of a bold disinvestment programme. We need some large-scale initiatives on this front to unlock the value of the huge chunk of government equity. A big disinvestment target would signal a more positive agenda and would have helped contain fiscal deficit to some extent. Hopefully, we should hear more in this regard during the year.
Given the extraordinary times we are living in, I do not believe that the current fiscal deficit is something to be alarmed about. Though he has not given a timeline, he appears committed to the Fiscal Responsibility and Budget Management target for fiscal discipline at the earliest.
(The writer is chairman & Group CEO of Bharti Enterprises)