The Lok Sabha on Friday unanimously gave the first stage of approval to the general budget for 2011-12 by voice vote with Finance Minister Pranab Mukherjee vowing that “we can, we shall do” to achieve 9 per cent growth in the Gross Domestic Product (GDP) during 2011-12 against 8.6 per cent this year.
The House also voted for the supplementary demands for grants (general) for 2010-11.
Earlier, Mr. Mukherjee, replying to the debate on the budget in the Lok Sabha, said when compared to the average GDP growth rate of 5.8 per cent reported in the then NDA regime, there was steady growth in the UPA regime over the years except during 2008-09, when it plunged to 6.8 per cent due to global economic slowdown.
“In the year [2010-11] which is coming to an end [GDP] is 8.6 per cent. And therefore if I project that my GDP growth will be 9 per cent, the figure is credible,” he said.
Amidst thumping of desks by members, he announced increase in the Member of Parliament Local Area Development Fund (MPLAD) to Rs. 5 crore from the present Rs. 2 crore, costing an additional Rs. 2,370 crore to the exchequer. This would be effective from April 1 this year and apply to members of the Lok Sabha and the Rajya Sabha.
Capital investment
Henceforth capital stock in educational institutions and hospitals would be treated as infrastructure sub-sectors and capital investment for these sub-sectors would be eligible for the viability gap funding scheme of the Finance Ministry, he said.
On the Rs. 500 crore “women's self-help groups development fund,” the Minister said it would operate through NABARD and be exclusively utilised for providing refinance on loans given to women SHGs on soft items.
Mr. Mukherjee announced the extension of the existing interest subvention scheme — providing short-term loans to farmers at 7 per cent interest with additional interest subvention for timely repayment — to fish farmers and fishermen too. “This would benefit over 20 lakh fish farmers/fishermen.”
Tax proposals
The Minister said he had received several suggestions and feedback from various quarters, including MPs, on taxation proposals which were under examination. “I shall respond to these issues in my reply to the discussion on the Finance Bill 2011 later during this session.”
On food inflation, he said though it had touched as high as 20.2 per cent in February 2010, resulting in the increase in prices of vegetables, foodgrains, oil, sugar, pulses and egg, it came down to 9.3 per cent now, thanks to the efforts by the government. Still he felt that “inflation is the most important issue which is to be addressed adequately.”
Even the present percentage of inflation “is not acceptable,” he said, adding oil, foodgrains and other commodities had global linkages which caused fluctuation in their prices but that “does not give an excuse not to address the issue. I have to address the issue squarely.”
Though the crude oil market had been fluctuating over the years with the cost of per barrel even touching $ 147 during January 2010, he allayed apprehensions that global events such as high oil prices might impact the country's growth.
