New Delhi: Prime Minister Manmohan Singh expressed optimism that the proposals in the Union Budget presented by the Finance Minister Pranab Mukherjee on Friday will help accelerate the growth momentum to a 9 percent level.
"My overall impression is that the FM has done a right mix of estimating the growth requirements as well as the same time building in it a certain amount of moderation on the price front," Manmohan Singh said in his post-budget interview.
Reacting to the contentious Re 1 hike in petro tax, over which the Opposition staged an unprecedented walk out, the Prime Minister defended Pranab Mukherjee saying the move will not trigger inflation.
"You must look at the total picture emerging from the budget. The net revenue gain for the Finance Minister is only about 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,” he added.
The PM also sought to put the petro hike in context by saying that the Finance Minister had rolled back tax when global crude prices had touched USD 112/barrel. But now that the international prices had fallen, “the economy could absorb the hike” and thus the proposal was on expected lines.
The Prime Minister also sought to fend off criticism over the delay in the implementation of the Goods and Services Tax saying that “direct taxes on the whole don’t present a problem” but only needed to be structured properly and it needed to be ensured that the apprehensions of the industry are removed.
“The direct taxes code must be a source to strengthening the growth impulses, dynamic impulses but the direct taxes code which was delayed it has aroused certain apprehensions in the minds of the business community. Nothing is lost in postponing the Direct Tax Code to 2011," he said.
About the opposition from the state governments on GST, Manmohan Singh said: “Until the states are agreed we cannot move fast. We will work for a concession in this regard.”
On the crucial fiscal deficit issue PM pointed out that the Pranab Mukherjee was committed towards fiscal prudence and he had already announced that he will cap the combined centre-state debt to 68% of the GDP. Moreover, a committee was being set up to ensure that the targets were achieved, as per the recommendations of the 13th Finance Commission.
On agricultural growth, which is stagnant for quite some time, the Prime Minister said that the Finance Minister had put due focus on the sector through the proposed “4-fold strategy”. “Despite negative agricultural growth, we are growing at 7.2% which means it is a tribute to manufacturing and services sector,” Singh pointed out.
He added that steps were been taken to increase agricultural productivity by concentrating on eastern and dry areas. Around 60,000 villages will be taken up to increase output and another five food parks set up, as per the budget announcement.
“The Finance Minister has done exceedingly well. He has done a very good job,” Singh concluded refusing to rate the budget by giving it a number.