The corporate sector called it a dud. But politicians know, this is an election budget
Akash Bisht, New Delhi, Hardnews
The interim budget announced by acting finance minister Pranab Mukherjee has disappointed India Inc while some called it populist with multiple sops for the social sector, including Rs 6,705 crore in child development schemes, Rs 4,900 crore for Bharat Nirman, Rs 30,100 crore for rural jobs schemes, while, mid-day meal scheme will get Rs 8,000 crore. Infrastructure is the only sector that received a boost. It was announced that the India Infrastructure Finance Company will raise Rs 10,000 crore from the market by the end of March 2009. As many as 50 infrastructure projects worth Rs 67,700 crore (Rs 677 billion) were given in-principle for final approval. The India Infrastructure Finance Company will raise an additional Rs 30,000 crore (Rs 300 billion) from the market in the next fiscal year.
Hardnews finds out, apart from this, the corporate sector called it a dud and will have to wait till the next government takes charge for any stimulus. While the corporate sector expected certain measures that would cushion the impact of the economic meltdown and help increase consumer demand, no such sops were announced. The highlight of the budget was an increase in expenditure of 34 per cent in defence, wherein the FM cited the recent Mumbai attacks as the trigger point. Mukherjee, in his budget speech, sought approval to finance the government's expenditure, till such time the regular budget is presented by a new government after elections, and passed by Parliament.
Mukherjee added that fiscal deficit had risen to 6 per cent of GDP in 2008-09 from 2.5 per cent that created panic among investors. It also gave opposition parties a chance to take a dig at the UPA government. Arun Jaitely said, "This government took charge when the economy was booming and is leaving it in such a sorry state."
The markets crashed after the interim budget for 2009-10 failed to deliver on investor expectations. Real estate, banks and automobile sector ran out of hope as the budget offered absolutely nothing to these cash-strapped sectors. The stocks of all realty, banking and the automobile sector fell sharply as there was a major selling bout in all the markets. Most called the budget a populist one - obviously trying to woo the common man ahead of general elections due by May.
Highlights of the Budget
* Fiscal deficit at 5.5 pct of GDP in 2009/10.
* Revenue deficit at 4 pct of GDP in 2009/10.
* Gross market borrowing seen at 3.62 trillion rupees in 2009/10.
* Total plan spending in 2009/10 seen at 9.53 trillion rupees.
* 2009/10 gross budgetary support 2.85 trillion rupees.
* GDP growth seen at 7.1 pct in 08/09.
* Substantial relief of about 400 billion rupees due to tax cuts in 2008/09.
*Defence expenditure raised to Rs 1,41,703 crore while it was only Rs 73,600 crore last year.
* Interest subsidy to farmers in 09/10.
* Farm loan waiver has so far cost 653 billion rupees.
* Rural job schemes to get 301 billion rupees in 2009/10.
* Rural health spending 120.7 billion rupees.
* Midday meals scheme for schools to cost 80 billion rupees.
* Urban renewal spending in 2009/10 at 118.4 billion rupees.
* Rural sanitation spending seen at 12 billion rupees for next financial year.
Delhi has been allocated a whopping Rs 2360 crore, an increase of Rs 1600 crore as compared to last year