The Budget for 2009-10 has been prepared with great skill and wisdom with the objective of stimulating the economy and returning to the high growth path, Union Home Minister P. Chidambaram said on Monday. Chidambaram was the Finance Minister in the previous UPA regime. The total size of the three stimulus packages provided in 2008-09 is estimated at Rs1.86trillion. The biggest stimulus in the Budget for 2009-10 is the Plan Expenditure of Rs3.25trillion and the Gross Budgetary Support of Rs2.39trillion for the Central Plan.  It is hoped that this, together with other measures announced by the Finance Minister, will give a boost to the economy.

The big take-aways from the Budget speech are:

• Primacy accorded to infrastructure including JNNURM, Accelerated Power Development and Reform Programme (APDRP), National Highways Development Programme (NHDP), Railways, Accelerated Irrigated Benefit Programme (AIBP) and new means of financing by IIFCL.
• Reaffirmation of fiscal responsibility and fiscal prudence and the promise to return to the FRBM targets as early as possible.
• Rs391bn for NREGA, Rs120bn for PMGSY and Rs88bn for IAY, all time tested and successful programmes to promote inclusive growth.
• Expansion of agricultural credit with a target of Rs3.25trillion, a two per cent interest subvention  and an additional one per cent back-ended subvention to farmers who repay their loans on schedule.
• Introduction of the draft Direct Taxes Code together with a discussion paper within 45 days.
• Reaffirmation of the intent to introduce GST with effect from April 1, 2010.
• Maintaining stability in tax rates for personal income tax and corporate tax.

The Budget speech contains a number of innovative ideas including:

• Switching over to nutrient-based fertilizer subsidy and moving towards a system where the subsidy is paid directly to the farmer
• Introducing the National Food Security Act
• Prime Minister’s Adarsh Gram Yojna for villages with a majority population of SC/ST
• Interest subsidy for educational loans taken by students belonging to economically weaker sections
• 100,000 houses for CPMF personnel through innovative financing
• Expansion of the New Pension System (NPS) through fiscal support, including tax exemptions, to the NPS Trust
• Increasing the non-promoter public shareholding in all listed companies, both in the public and private sectors

I am confident that the Budget will be appreciated by all sections of the people.  I congratulate the Finance Minister Pranab Mukherjee.

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