Well be worlds top small car maker

New Delhi, March 10 | Updated: Mar 11 2006, 05:30am hrs
Reiterating that he would rather bet on growth as the best antedote to poverty, finance minister P Chidambaram said that industry and services would need to grow at a very high rate to achieve a consistent 8-10% Gross Domestic Product (GDP) growth, even as agriculture would now need a helping hand to grow faster.

Winding up the Budget discussions, Mr Chidambaram said in the Lok Sabha on Friday that growth in the next fiscal would come from agriculture, provided the weather does not play spoilsport.

We will have to make agriculture less monsoon-dependent, he said, referring to big budgetary outlays made for irrigation projects and the proposed World Bank-aided Rs 4,400 crore project for reconstruction of water bodies.

He said a policy statement would be made soon to increase the flow of bank credit to small and marginal farmers. The National Agri Insurance Scheme would continue until a better scheme was formulated.

He called the Budget announcement that crop loans would be provided to farmers at 7% interest an unprecedented step.

Urging the Left to throw away ideological blinkers, he said India can be a world leader in at least a dozen manufacturing industries such as automobiles, textiles, leather, handicrafts, food processing, steel and petroleum products.

Changing Gears

8% growth was tantamount to creation of 80 lakh additional jobs
Arrears of fertiliser subsidy would be paid before March 31
States should spend more so that growth is accelerated
Policy statement would be made to increase the flow of bank credit to small farmers

See in the automobile revolution that is happening around us, we can be the worlds largest producer of small cars in 3-5 years, he said, adding that the excise duty cut to 8% in the Budget would trigger more investment. Services anyway would grow autonomously.

Stating that an 8% growth was tantamount to creation of 80 lakh additional jobs, he said, additionally, the National Rural Employment Guarantee Programme would help generate jobs for the poor.

Avowing the UPA governments commitment to the National Common Minimum Programme, Mr Chidambaram said subsidies would not be reduced, while they would be targeted at the truly needy.

The food subsidy to sustain the public distribution system would be provided year after year, he averred. On fertiliser subsidies, he said a new scheme to give subsidies directly to the farmers was under consideration and till that was introduced, the existent subsidies would be maintained. He said some arrears of fertiliser subsidy would be paid before March 31.

Tax collections were growing at around 20% for the last two years and would grow at over 20% next fiscal too. Despite moderate tax rates, tax revenue would increase Rs 50,000 crore in 05-06, and Rs 54,000 crore in 06-07, the minister said, adding that the growth in revenue had helped to provide funds to flagship social sector projects.

States have cash balances of Rs 45,000 crore as on Wednesday. They should spend so that growth is accelerated, he said.

He said the proposed five ultra mega power projects would be awarded by the end of 2006. The projects, with capacity of 4000 MW each, would entail an investment of Rs 90,000 crore.