The major challenge of the Budget 2009 was to strike the right balance between fiscal prudence and the need to provide a major stimulus to accelerate GDP growth and enhance investors? confidence.
The clear signs of recovery of Indian economy during the last quarter, as indicated by various macroeconomic parameters, created a golden opportunity to pursue bold innovative strategies to take economy back on the high growth trajectory. The major strengths of Indian economy during 2008-09 were significant growth of service sector, sustained high growth of FDI flows and net flow of invisibles, low external debt service ratio of less than 6%, high domestic saving rate and remarkable strength of the financial sector.
Unless this Budget is followed by more aggressive Budgets in 2010 and 2011, the Indian economy may face difficulties in returning to the path of high GDP growth of 9% by even 2011, which will affect macroeconomic targets in the 11th Five Year Plan.