This monster just refuses to be tamed! With a devilish grin it seems to say “Heads I win; tails you lose”. Faced with such a formidable opponent called Inflation, the Union Finance Minister seems like a precariously perched trapeze artist gingerly trying to juggle multiple rings, even as the expectant public waits with bated breath…
Well, as the Indian FM, Mr. Pranab Mukherjee presented the Union Budget for fiscal 2010- 11 on February 26, 2010, no applause was forthcoming…only groans of dismay.
The moot point is could it have been otherwise?
The Budget is the prime instrument through which any Government steers the economy, as it walks the tight-rope, between economic growth on one hand and social justice on the other. Even when the Indian economy looked rosy with GDP near-touching double digits (2007-08) there was clamour decrying lack of ‘inclusive growth’. In all fairness, there is no denying that the last budget and the current one have tried to correct this. Aiming at equitable and inclusive growth the current budget also provides impetus to rural and agricultural growth.
Presenting the Budget the FM said:
“The fiscal year 2009-10 was a challenging year for the Indian economy. The significant deceleration in the second half of 2008-09, brought the real GDP growth down to 6.7 per cent, from an average of over 9 per cent in the preceding three years. We were among the first few countries in the world to implement a broad-based counter-cyclic policy package to respond to the negative fallout of the global slowdown. It included a substantial fiscal expansion along with liberal monetary policy support.”
“The effectiveness of these policy measures became evident with fast paced recovery. The economy stabilised in the first quarter of 2009-10 itself, when it clocked a GDP growth of 6.1 per cent, as against 5.8 per cent in the fourth quarter of the preceding year. It registered a strong rebound in the second quarter, when the growth rate rose to 7.9 per cent. With the Advance Estimates placing the likely growth for 2009-10 at 7.2 per cent, we are indeed vindicated in our policy stand.”
The Finance Minister after referring to the global crisis and certain domestic problems further said:
“…… I can say with confidence that we have weathered these crises well. Indian economy now is in a far better position than it was a year ago. That is not to say that the challenges today are any less than what they were nine months ago… ”
Clearly there are no easy answers. Even though the official figures and the economic logic cannot be faulted, it is equally evident and troublesome that the runaway inflation- particularly food inflation - has thrown even middle class kitchens into a tizzy. The plight of the poor can well be imagined.
Mr Finance Minister – even a 10% growth is not good enough where a substantial portion of population is below poverty line !!!!
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