India is aiming for annual economic growth of 10% in the next few years, Finance Minister P Chidambaram said on Tuesday while delivering a ”common man’s Budget” that focused on rural areas, social security and infrastructure.
”I believe that growth is the best antidote to poverty,” Chidambaram said while presenting the government’s 2006-2007 Budget to Parliament.
Chidambaram’s ministry projected India’s growth at 8,1% in the current fiscal year, which will end on March 31, after growth of 7,5% last year. It attributed this year’s surge to an increase in investment, an industrial resurgence and moderate inflation.
Chidambaram who drew the budget with help from economist-Prime Minister Manmohan Singh, hiked allocations for rural areas and announced new incentives for farmers, heeding the demands of the left-wing partners of the ruling coalition, the United Progressive Alliance.
The Budget calls for spending on rural infrastructure to rise by $4,2-billion.
Although India is now the world’s second fastest growing economy behind China, nearly a quarter of its one-billion-plus population lives in poverty, and about 70% of India’s population lives in the rural areas.
The budgetary outlays for education, employment schemes, health and infrastructure were also increased as were allocations for defence, which rose from $18,6-billion to $20-billion, to provide for the modernisation of the armed forces.
About $8,3-billion were earmarked for new arms purchases.
The government also sought to please India’s burgeoning middle class and the corporate sector by leaving personal income taxes and corporate taxes untouched.
Singh said Chidambaram had delivered an ”outstanding Budget”.
”Overall, the Budget will be a big stimulus to growth impulses,” Singh said, adding that it would bring relief to the ”common man”, displayed a strong emphasis on helping farmers and takes care of India’s security needs.
”The Budget is an excellent combination of different factors with the emphasis being laid on infrastructure, the social sector, social justice and economic growth,” he said. – Sapa-DPA