Budget tries to woo the middle class

February 18, 2014 - 6:54:10 am

Finance Minister Palaniappan Chidambaram (centre) arrives at the parliament to present the interim budget in New Delhi yesterday. 

New Delhi: Seizing the limited elbow room in an election year, Finance Minister 

P Chidambaram presented the interim budget for the next fiscal yesterday saying the Indian economy was more stable today than two years ago and sought to win over key sections like scheduled castes, minorities, women, farmers and army personnel with more money for their welfare while pleasing the middle class with excise cuts to make cars, mobile phones and items of daily consumption cheaper.

The finance minister could not change the tax regime vastly, as it required legislative approvals and is generally left for the next government in an election year. The direct tax rates were left unaltered. 

But that did not stop him from indulging in some self-acclamation for meeting key targets while highlighting achievements of his government. 

In his largely uninterrupted 56-minute speech, which many feared would get disrupted by the volatile Telangana issue that has not let the last session of the 15th Lok Sabha function properly, he sought to drive home the point that the government did not spend recklessly and more than met the targets for fiscal deficit set for 2013-14. 

At the same time, farm credit disbursals and public investments, notably on infrastructure, were met despite challenges, he said, and added concerns over food inflation and current account deficit were also adequately addressed.

“No one is speaking about downgrades now,” said Chidambaram, referring to the threats given by some global credit rating agencies to lower India’s economic outlook that could have rendered junk status to Indian bonds and triggered a flight of capital.

“The economy is more stable today than it was two years ago,” said the minister, tabling India’s 83rd national budget and the 9th such personal exercise for him. India’s growth, he said, will be 4.9 percent this fiscal, against 4.5 percent in 2012-13.

“I wonder how many have noted the fact that India’s economy, in terms of the size of its GDP (gross domestic product), is the 11th largest in the world. There are great things in store.”

The main budget for the financial year 2014-15 will be presented by the new government that will come to power after the general elections, the schedule for which is likely to be announced by the Election Commission soon.

Prime Minister Manmohan Singh, who had earlier presided over the cabinet meeting where the interim budget was approved, congratulated Chidambaram for a “well balanced” budget, one that portrayed a “realistic picture” of the economic situation in the country.

“The finance minister has aptly summarised the economic and social achievements of the last 10 years which our government is proud of,” Manmohan Singh said, as the opposition parties said it had nothing new and only listed past achievements with an eye on polls.

The markets, which briefly slid immediately after the budget speech began, was otherwise positive. The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) ended the day at 20,464.06    points with a gain of 97.24 points or 0.48 percent. IANS

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