"Budget tailored to meet the challenges of the economy in the next fiscal year"

Prime Minister Manmohan Singh said on Monday that Union budget 2011-12 was tailored to meet the challenges of the economy in the next fiscal year and aimed at fiscal consolidation and moderation of taxes.

In his comments to Doordarshan, the Prime Minister said that it was not only growth-oriented but also signalled the intent of his government to push forward the reforms agenda.

Praising the Finance Minister for doing a ‘commendable job,' Dr. Singh told the channel that the proposals build on the current fiscal year's growth rate of 8.6 per cent and lay the foundation for 9 per cent growth in the coming year.

“This is a budget that matches the challenges that our economy faces —sustained growth, inclusive growth, equitable growth and thus, a determined effort to curb inflationary expectations,” he said.

Dr. Singh argued that greater tax compliance was equally important and to achieve this, moderate rates and simplified system were essential. “And the Finance Minister has walked on both these legs.”

Asked about the absence of any amnesty scheme to unearth black money, the Prime Minister said such plans in the past had met with little success.

“Well, amnesty schemes have been implemented in the past. I don't think they have succeeded in providing a permanent cure for black money. We need to have a systems reform in a holistic manner to deal with this menace.”

“You cannot please all”

Asked why there was no provision for an additional tax incentive to women, the Prime Minister said: “You cannot please all the people. The Finance Minister has done as good a job as possible.”

He contended that raising of the exemption limit for the people on the lowest rung of the ladder from Rs. 1,60,000 to Rs. 1,80,000 would benefit all men and women and for older citizens, Mr. Mukherjee had done much more.

“I think, the signals are that this is a government which is reform-oriented. He has promised that he will come with legislation with regard to insurance, and with regard to pension fund. In totality, if these promises are converted into solid Acts of parliament, they will provide a boost to the capital market as well as to the corporate sentiment all around.”

Good and balanced, says Chidambaram

Union Home Minister P. Chidambaram described the budget as “good” and “balanced,” saying it will promote inclusive growth, and the projected revenue increase will be used for augmenting investment in health, education and security.

“The Finance Minister has focused on high growth; on investing in, incentivising and increasing agricultural production in order to moderate inflation; and on fiscal consolidation,” Mr. Chidambaram, who was Finance Minister till November 2008, said in a statement here.

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