Prime Minister Manmohan Singh on Friday described the Union budget presented by Finance Minister Pranab Mukherjee as an “exceedingly good” and one which would help the economy return to nine per cent growth.
Stating that it represented “a job well done,” Dr. Singh said: “You must look at the total picture emerging from the budget. The net revenue gain for the Finance Minister is only Rs.20,000 crore. In an economy as large as India, this resource mobilisation effort and balance should not trigger any inflationary expectation. At the same time, it gives the muscle needed.”
Defending Mr. Mukherjee within minutes of the Finance Minister drawing the ire of nearly half the Lok Sabha for the proposal regarding restructuring of fuel prices, Dr. Singh said: “The Finance Minister has not called back to the pre-stimulus excise duty rate. He has still exercised moderation signalling the economy that you cannot have all things together.”
On the issue of fuel price restructuring, the Prime Minister explained that “the economy has the capacity to absorb this order of adjustments in excise duties and customs duties without generating a wholesale inflationary spiral.” Further, he sought to point out that these duties were reduced when petroleum prices had touched $112 a barrel. “Now, petroleum prices are much lower,” he added.
As for the introduction of Goods and Services Tax, Dr. Singh said it required a consensus and that all States would have to be on board for it to be implemented. Hopeful of addressing such contentious issues during the year, the Prime Minister sought to sound optimistic about the economy, maintaining that it would grow by 7.2 per cent despite a negative agricultural growth.
For his part, Mr. Mukherjee said he had three objectives while formulating the budget — fiscal consolidation, inclusive growth and returning the country to a growth trajectory as quickly as possible.
Confident of achieving the budgetary proposals vis-À-vis growth and fiscal consolidation, he underlined the fact that 37 per cent of the plan allocation had been set aside for the social sector.
Though he refused to field questions in the post-budget customary fleeting interaction with the media on Parliament House premises, Mr. Mukherjee further stressed the “aam aadmi” component by pointing out that 25 per cent of the plan allocation for infrastructure development — which alone accounted for 46 per cent of the total — was reserved for rural India.