The Union Budget 2009 keeps promises in the pursuit of progress — it promises to include all sections of society in enjoying the fruits of a higher growth trajectory.
That’s why the Union Budget has focused on long-term development goals, striking a fine balance between industrial and agricultural growth, exports and domestic consumption, employment generation and poverty alleviation, and infrastructure development and social services, such as health and education.
This is probably on the conviction that a high rate of inclusive economic growth would, over the long term, be a more fundamental and sustainable way to achieve national growth objectives.
The Honourable Finance Minister's decision to greatly increase spending on the National Rural Employment Guarantee, village development and rural housing, and similar development schemes should help drive the government’s aim of ensuring inclusive growth. At the same time, the higher spending on urban development and infrastructure signifies an effort to stimulate the economy at a more fundamental level.
That the Honourable Finance Minister has done this without raising taxes — indeed cutting many of them, such as the Fringe Benefit Tax — is commendable. While managing the rising fiscal deficit, and perhaps, later, inflation, could be a challenge, the Honourable Finance Minister has taken some steps towards a solution. His simplification of tax procedures and structures is very productive, and the new Direct Tax Code, which the government will unveil in 45 days, should raise collections.
The incentives in the Union Budget for private investments in infrastructure, education, social security and energy security should also provide an impetus to these sectors and boost receipts.
The other key structural changes in fiscal administration the Honourable Finance Minister announced, such as the decision to move from a product-based fertilizer subsidy mechanism to a nutrient-based one, and the move towards a market pricing regime for petroleum products, are also laudable.
Significantly, since most of the government's new development expenditure will be spent through institutions, the Honourable Finance Minister's decision to use technology to ensure efficient and transparent management of the money will greatly improve governance and lower waste.
The Honourable Prime Minister's larger vision for a new India is also embodied in projects such as the unique citizen number identification plan, a pan-India virtual employment exchange, a national gas grid and central universities in every state.
There is no doubt that these measures will propel India into a higher growth orbit.
In essence, the Budget is a fine combination of pragmatic, humane and bold policymaking. It will prove to be a crucial step in building the foundation upon which a progressive and prosperous India will bloom.
(The writer is chairman and managing director, Reliance Industries Limited)