This years Union Budget has come at a time when the global economy is gradually recovering from the economic and financial crisis. It also coincides with a phase when the domestic economy is experiencing high inflation coupled with disproportionate spike in international prices of crude oil and export markets showing a slow but gradual upward trend. In such uncertain conditions, it is heartening that the economy has recorded satisfactory growth of 8.6% and is expected to return to 9% growth in 2011-12. On one hand a major challenge for the finance minister was to create conditions for sustained high economic growth and on the other, take measures to contain inflation. Under the given circumstances, I think he has been able to strike a good balance.
The finance minister has set a challenging target of 3% for the fiscal deficit by financial year 2013-14. It is clear that the governments fiscal consolidation plan is on track and strengthening the fundamentals of the economy continues to be a major priority area.
Where the manufacturing sector is concerned, we welcome the announcement about a new manufacturing policy which is to be announced shortly. We also welcome the governments intent to increase the share of manufacturing in GDP (gross domestic product) from the present 17% to 25% in the next 10 years. Setting up of a National Mission for Hybrid and Electric Vehicles coupled with exemptions in indirect taxes on kits and parts of hybrid vehicles are welcome measures and reflect the governments commitment towards a clean environment.
The emphasis on infrastructure is evident from the 23% increased allocation for the sector along with simultaneous resource raising measures. Reforms in the insurance, pension funds and banking sectors reflect the governments commitment towards continuing on the path of accelerated reforms. Increased budgetary allocations for agriculture, social sector, defence, education and healthcare are all welcome features.