NEW DELHI: India’s finance minister today vowed to bring the government’s yawning budget deficit under control as he presented a new budget that counts on higher tax revenues to sustain social spending.

Speaking in parliament, finance minister Pranab Mukherjee said he had laid down a road map for reducing the country’s fiscal deficit, which soared to a 16-year high of 6.9 per cent of economic output.

The shortfall would drop to 5.5 per cent in the next fiscal year to March 2011, and then 4.8 per cent in the following 12 months, though there would be no let-up in the left-leaning government’s focus on huge social programmes.

To increase government receipts, Mukherjee announced a host of tax measures including a plan to introduce a nationwide goods and services tax aimed at simplifying India’s revenue collection system by April 1, 2011. He also announced plans to sell stakes in state-owned companies and complete auctions of bandwidth for high-speed 3G mobile phone networks. His figures banked on higher tax

revenue generated from

the rapidly accelerating economy.

“We want to make this recovery broad-based,” Mukherjee said as he announced increases for education, health, rural and urban infrastructure and farmer assistance.

“Growth is only as important as what it enables us to do,” Mukherjee said, adding that the government wanted to “harness the recent economic gains to make economic growth more inclusive”.

“Inclusive growth” is the watchword of the Congress party-led government, which has promised to ensure that India’s rapid expansion benefits the country’s hundreds of millions of desperately poor.

He said the government wanted to revert to the nine per cent economic growth it enjoyed before the financial crisis. “I can say with some confidence that we have weathered this crisis well,” he said.

A report from the finance ministry said yesterday the economy would rebound.