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Mukherjee set to present Union Budget tomorrow
New Delhi, IANS:
Amid high expectations in a slowing economy, Finance Minister Pranab Mukherjee will present India's national budget for this fiscal on Monday, seeking a fine balance between the need for resources to fund welfare schemes and minimising the burden on the average citizen and industry.
The veteran politician will need to draw from his experience of having presented three regular budgets as finance minister between January 1982 and December 1984 and push forward the agenda listed in the interim budget he tabled in February.
"Extraordinary economic circumstances merit extraordinary measures. Now is the time for such measures," Mukherjee had said when he presented the interim budget in the Lok Sabha, the lower house of parliament, Feb 16.
"Depending on the response of the domestic economy and the revival of the global economy, there may be a need to consider additional fiscal measures when the regular budget is presented by the new government after the elections."
Monday will be the day when he will have to consider these fiscal measures.
At the macro level, the finance minister will be concerned over the fact that the growth rate of India's $1.2 trillion economy had decelerated to 6.7 percent last fiscal from an average of over nine percent in the preceding three years.
But his hands in terms of additional allocation will be tied by the high fiscal deficit of the central government that ballooned from 2.7 percent in 2007-08 to over six percent the next year.
A low inflation rate, though, will be a comforting factor.
Mukherjee also has to contend with his ministry's Economic Survey for 2008-09 tabled in parliament on Thursday that suggests some sweeping reforms - like resumption of divestment, a cut in subsidies and allowing foreign equity in retail and defence equipment.
And slowdown-hit industry hopes for specific measures to suit the needs of sectors like steel, cement, auto, energy, textiles, banking, pharmaceuticals, chemicals, consumer goods and realty and construction.
"This is necessary to curb the bloated fiscal deficit of the government," said the Associated Chambers of Commerce and Industry of India on Sunday, having already given its wish list to the finance ministry - as have other chambers.
Experts, however, maintain the prospect of a cut in corporate taxes look bleak, with India Inc. only hoping that the across-the-board excise duty cuts in the interim budget is not reversed.
The salaried class, though, is looking forward to the re-introduction of the standard deduction in income tax that will place more money in their hands and push demand.
This apart, with most ministries having set their 100-day agenda at the instance of the prime minister, allocations for many of the outlined programmes are also expected to be addressed in the budget.
