After inheriting stunning economic growth of 8.3 per cent, the new Congress-led Government faces a challenge in winning the confidence of investors when it unveils its first Union Budget this coming week.
Dependent on the support of Communist parties for survival, Prime Minister Manmohan Singh is under pressure from Leftist groups to promote the interests of poor farmers and workers through subsidies rather than pushing economic reforms.
Millions of India's poor voted for the Congress party and its allies after being left behind in the economic boom achieved during the previous BJP-led NDA Govt.
Finance Minister P Chidambaram will present the fiscal 2004-2005 budget in Parliament on Thursday, Ghulam Nabi Azad, the Parliamentary Affairs Minister, told reporters on Saturday. India's economy grew by 8.2 per cent in fiscal 2003-2004, its fastest rate in 15 years, the Government said on Wednesday. It was the world's second-highest growth rate after China's 9.1 per cent in 2003.
The rate was more than double the four per cent India registered the 2002-2003 financial year, which runs from April 1 to March 31. Economic growth was boosted last year by the farming sector, where output jumped 9.1 per cent after contracting 5.2 per cent a year earlier because of a severe drought, the government-run Central Statistical Organization said.
{{/usCountry}}The rate was more than double the four per cent India registered the 2002-2003 financial year, which runs from April 1 to March 31. Economic growth was boosted last year by the farming sector, where output jumped 9.1 per cent after contracting 5.2 per cent a year earlier because of a severe drought, the government-run Central Statistical Organization said.
{{/usCountry}}However, average daily trading volume on India's main stock exchange in Mumbai fell significantly to 86 million shares in June from 127 million shares in April.
A business newspaper has attributed the decline to uncertainty among investors after the April-May elections and pre-Budget worries. Another challenge for Prime Minister Singh is a standoff over an Opposition demand for the firing of a half-dozen Cabinet ministers who face bribery charges or criminal cases of murder, kidnapping and extortion.
The Opposition did not allow any business to be transacted in Parliament when it met for a week immediately after the elections.
"I appeal to the opposition to cooperate in running the budget session smoothly," Azad said on Saturday.
The main Opposition already has decided to boycott the presentation of the Railway Budget on Tuesday by Railways Minister Laloo Prasad Yadav, who faces a trial on bribery charges.
The main Opposition is to meet on Monday to decide whether to boycott the presentation of the main Budget as well.