India unveils pro-poor budget

Agence France Presse

New Delhi, July 8:

India‘s new-left leaning government today unveiled a pro-poor budget which also cheered investors with sweeping liberalisation measures while pledging economic growth of seven-eight per cent. Delivering the budget in parliament, finance minister Palaniappan Chidambaram said his ‘mantra’ would be ‘maintaining growth with equity.’ Chidambaram pegged India‘s fiscal deficit at 4.4 per cent of gross domestic product (GDP) in the fiscal year beginning April, down from 4.6 per cent the previous year. He also committed the government to wiping out the revenue deficit by 2008-2009. “To achieve fiscal prudence will be my over-arching objective, our economic strategy is to empower the people, especially the poor, with access to education and health,” the Harvard-educated minister said, “It will reinforce the growth process itself.”

The budget slapped a one-off surcharge of two per cent on taxes, amounting to Rs 40-50 billion Indian Currency (IC), to fund education and free lunches in state-run schools. “The government will ensure that children remain in school for at least eight years and that none go hungry,” said Chidambaram. Investors gave the thumbs up to Chidambaram‘s proposal to hike the foreign direct investment limit in the key telecoms, insurance and aviation sectors.

Budget buzzers

NEW DELHI: Following are the highlights of the Indian budget for 2004-05

•Additional expenditure allocation of Rs100 billion.

•Plan expenditure to be raised to Rs1.4 trillion.

•Doubling of agriculture credit in three years.

•A five-year roadmap to achieve Common Minimum Programme (CMP).

•Plan resources in interim budget are sufficient.

•Cess of two per cent for education and midday meals.

•Government to ensure children remain in school for at least eight years.

•Guaranteed work for 100 days per year to one member of every family.

•Focus on rural infrastructure.

•Planning Commission to reorient approach to planned development.

•Aim is to provide growth, stability and equity.

•Revenue deficit to be eliminated by 2008-09.

•Focus on agriculture and fiscal consolidation.