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The flavour New Congress Government inherited an economy growing at the
rate greater than eight percent from the previous National Democratic
Alliance (NDA) Government. Indeed, India was shining up to a
certain level under the previous government while the masses lived with numerous hardships in spite of the economy growing so rapidly that the experts predicted it to double within a decade. With foreign exchange reserves standing at US$100 billion, India became the most favoured destinations for offshore back offices. The UPA Government is determined to maintain the course of the growth of the economy, but with a human face, despite its Leftist Allies and the constraints of its Common Minimum Programme (CMP) as is evident from the budget announced by this United Progressive Alliance (UPA) Government of Congress headed by Dr. Manmohan Singh the Prime Minister and P. Chidambaram as the Finance Minister, both being the canniest fiscal brains. Inflation rate to be contained to medium single level, expanding industry by at least by 10 percent a year, fiscal consolidation, eliminating the revenue deficit through revenue enhancement as well as by expenditure management are the encouraging steps envisaged. The budget seeks to translate the vision of combining rapid economic growth with faster progress on the road to social equality. To these ends: FDI limits raised in telecom from 49 percent to 74 percent of equity, from 26 percent to 49 percent in insurance, Investment Commission and National Manufacturing Competitive Council to be set up, are some of the high points which ensure the success envisioned by the UPA Government. It will not be an exaggeration to comment that the budget represents the big picture of the continuity in the economic policy. Allowing the hike in their holdings has made the foreign partners in insurance firms all set to raise their stakes. For an example, the Metlife Insurance MD Venkatesh Mysore informs that the US-based Metlife will increase its stake, which will represent over $100-billion Metlife Inc in the Indian JV.
The poorer sections of society have been kept in special focus by the Budget, which is notable for a 180-degree shift in favour of agriculture, rural development and poverty alleviation. At the behest of the Prime Minister, the government announced an urgent debt relief for the farmers and simultaneously enhanced the credit package for them. Thus, farm credit gets stepped up by 30 percent, to 105,000 crore. This shift along with other concerns of this Government for the weaker sections of society in general, do represent the Human Face of the policy of the government. For the senior citizens, special bonds fetching a return of nine percent are being made available, though there is no change in the rate of interest on small savings such as Public Provident Fund, General Provident Fund, Employees Provident Fund, etc. Those with taxable income up to Rupees one lakh per annum will have to pay no tax. For those with a taxable income above Rupees one lakh the existing liabilities remain, plus the two percent education cess. The education cess is expected to yield Rupees 4,000 to Rupees 5,000 crore in a year for increased allocation for educational sector. The Manmohan Singh government is especially concerned with the shrinking employment opportunities for the youth of the country.
Finally it can be stated with some confidence that the UPA government is stronger than it appears to be because nobody on its side wants the return of the previous government.
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