India tackles deficit in budget
NEW DELHI — India vowed Friday to rein in its gaping public deficit with a new budget that counts on higher tax revenue and sales of stakes in state firms to…
NEW DELHI — India vowed Friday to rein in its gaping public deficit with a new budget that counts on higher tax revenue and sales of stakes in state firms to sustain the government's flagship social spending.Finance Minister Pranab Mukherjee told parliament the government would pare the deficit, at a 16-year peak of 6.9 percent, to 5.5 percent of gross domestic product in the next fiscal year to March 2011 and 4.1 percent in two years."On the path of fiscal consolidation, I have given the correct signal," said Mukherjee, who also rolled back some stimulus measures put in place during the global slump but left most untouched.Reducing the deficit has been a priority for the left-leaning government which is also committed to its central goal of ensuring rapid economic development benefits India's hundreds of millions of desperately poor. Mukherjee dedicated the budget to "the common man," saying he would cut the deficit while hiking outlays for roads, ports and other infrastructure as well as for schools, jobs and health.He also announced steps to boost the crucial rural economy and agricultural output, hard hit last year by the weakest rains in nearly four decades, and put more money in consumer pockets by raising personal tax exemption limits.Total spending would increase by 8.6 percent, he said.Mukherjee is counting on higher income from taxes generated by quickening growth in Asia's third-biggest economy to lower the deficit.He said the economy, forecast to grow 8.75 percent next year after expanding by at least 7.2 percent this year, should expand by 10 percent "in the not too distant future." More money would come from sale of bandwidth for high-speed 3G mobile phone networks expected to raise 7.6 billion dollars and an aggressive drive to sell stakes in state firms such as UTI Asset Management, India's oldest mutual fund.The government raised 5.4 billion dollars last year from stake sales and expects to get 8.6 billion dollars this year."Growth is only as important as what it enables us to do," Mukher
last modification 2010-02-27 01:15:17
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