Thursday, February 28, 2008

Union Budget Likely to Focus on Poor as Elections Draw Closer

by Phillip Horton

The Indian budget which will be presented in the Parliament today is expected to focus on the poor and this budget will be a deficit spending budget of the UPA government. The budget is also expected to encourage infrastructure development in the country and all this is being seen as part of the UPA government’s plans for the preparation towards the upcoming elections in the country. The victory of the present UPA government in the 2004 general elections was largely because of the support from the poor section of India which has not benefited from the current boom of the Indian economy and this year’s union budget will be the last budget of the UPA government as elections are just fifteen months away.

The chief economist with the CRISIL ratings agency Dharma Kriti Joshi thinks that the rural economy of India was largely deprived from the fruits of the present success story of the Indian economy and hence this year’s union budget by the government will be an ‘inclusive budget’. The principal economist with CRISIL further added that the communist supported alliance is supposed to learn a lesson from the experience of the former government led by the Bharatiya Janata Party which had to suffer defeat in the elections even if there was great economic growth in the country. Palaniappan Chidambaram, the Indian finance minister will be putting the union budget for the fiscal year March 2009 against the background of sluggish growth and a crawling inflation that had badly affected the poor in the country and which are also the supporters of the government in the previous general elections.

The union budget is also believed to have made provisions to encourage the declining agriculture sector as well as enhancing the crumbling infrastructure in the country. According to the estimates of economists the crumbling infrastructure is the main obstacle in the economic growth and a boost to education to cover up is a likely skill catastrophe. The Economic Survey, which is a pre budget report, predicted on Thursday that the growth for the financial year to March 2008 to be at 8.7% which is a drop from 9.6% from the earlier year. And this drop in the estimate is because of a forceful monetary restriction to fight inflation. However the Indian economy has still retained its place as the second highest growing economy just after China in the world.

The survey also said that taking into consideration the inflation and the crumbling infrastructure, the third biggest economy of Asia will find it challenging to keep growth at an average of 9% as planned by the government in the recent five year plan. The report also added that nonetheless the economy has expanded considerably to a higher phase of growth. Further as per the report increasing the economic growth to double figures, is a key factor in taking out millions of Indians from the depths of poverty which will be even more demanding. The finance minister said that cautious optimism is the watchword for the next fiscal year.

 

 

 

Stories related to: Union Budget Likely to Focus on Poor as Elections Draw Closer

 

 

Visited 518 times, 1 so far today