Finance minister P Chidambaram?s Budget 2008-09 is expected to be a populist one, with the government likely to roll out a number of social sector schemes. Education, healthcare and infrastructure are expected to be key areas for which the government will open wide its purse in the coming fiscal.
And expect very little tinkering with tax rates: this will be a ?spend? Budget with an eye on the forthcoming general elections. That means more schemes for employment generation, agriculture, farmers and rural development.
The government?s plan expenditure is expected to be significantly higher in 2008-09 than its estimated Rs 2,05,100 crore in 2007-08. While full-fledged Budget preparations are yet to start, the government is unlikely to veer far off the populist brief. The Centre has already rolled out a number of social sector schemes, including a Rs 25,000-crore agriculture revival plan and a Rs 5,000-crore higher education plan, apart from rural and unorganised sector employee benefit plans.
Helping to give the government confidence to go on a massive spending programme are the buoyant tax revenues, which have filled the coffers as a result of 9% economic growth. Tax officials expect direct tax collections to touch Rs 3 lakh crore and indirect tax collections are also expected to reach their Budget estimates after a long time this fiscal.
On the deficit side, too, things seem to be well enough in control for the government to dole out its largesse. The finance minister has time and again said he is confident of reaching the deficit targets. The government has set a target of 1.5% of GDP as revenue deficit for 2007-08 and has estimated the fiscal deficit at 3.3% of GDP.
In this year?s Budget, too, the government had introduced a number of social sector schemes such as the National Means-cum-Merit Scholarship Scheme and the Aam Admi Bima Yojana.