Budget 2007 - 2008

Budget anti-inflationary - Prime Minister Manmohan Singh

Posted On : 2007-02-28 11:03:29( TIMEZONE : IST )

Budget anti-inflationary - Prime Minister Manmohan Singh

Qn. There was a lot of talk that this budget will be geared more towards control of inflation because important elections are soon coming up. Do you think that this budget is going to control inflation?

PM: Well, the budget certainly is anti-inflationary. The fact that the fiscal consolidation programme is on target - the fiscal reduction and the revenue deficit reduction - we are moving in the set direction. That itself should be an assurance that inflation will not be allowed to get out of hand. But in addition, if you look at the whole programme of reduction in customs duties and excise duties, I think that would also strengthen the anti-inflationary bias of the Budget. Moreover, the emphasis that is now being laid on supply side responses, the National Programme for Pulses, the National Programme for utilization of Ground Water resources, the rainfed authority working to give a new momentum to the utilization of the dry land agriculture potential. All these would strengthen the supply side responses. In the short term the fact that the budget seeks fiscal consolidation. The fact that customs duties and excise duties have been reduced in a number of sensitive commodity areas, will certainly impart the anti-inflationary bias to the budget.

Q. The reason why this has become an important question is if you look what has happened , it is really the food prices that has gone up a lot and world wide, the food prices have been going up. Do you think we have enough resources within our Government and within the economy to check prices?
PM: Of course, I think we have done it many times before. That is one area in which we are now more open. But that also is a help and sometimes when we get into domestic bottlenecks, we can always import. I think last year we imported five and a half million tonnes. We can import commodities which are in short supply - oilseeds, to some extent pulses not to a great deal but foodgrains, oilseeds, and vegetable oils - these are certainly essential commodities which if we run into domestic supply bottlenecks, we can always import.

Qn. You mentioned the fact that you are an open Government so that we take you to some items in the budget. It is clearly pro-governance, computerization, of PDS, budget talks about one identification number for our financial services. Sir, is this going to be a very very specific focus right through not just this year but in the years to come.

PM: Well I think e-governance is a means to improve the quality of governance and that’s I think a commitment we have made and we take it very seriously.

Qn. This is the first time I saw a budget which talked about Plans A, B and C.

PM: Well I think we are living through uncertain times. We have a substantial increase in the budgetary support for the plan of about 19 per cent but we also recognize that there are legitimate additional expenditure demands which will arise as we unfold the contours of the 11th Five Year Plan and so we will review, the situation towards mid-July for example and we have a contingency plan to increase expenditure to the extent of about 7000 crores in due course of time. Also we are toying with the idea of utilizing a part of the foreign exchange reserves for infrastructure development and those things are being discussed with the Reserve Bank and in due course of time, they will materialize and therefore you have a budget which pays lot of emphasis on improving our access to basic social services. You have a budget which also strengthens the social safety net, the National Rural Employment Guarantee Programme is being expanded to include now 330 districts - half the districts of our country. A new life insurance programme has been launched for landless workers. In addition, we need to strengthen the impulses to expand investment in infrastructure.

Qn. The budget talks about enabling people so that especially the socio-economically backward people to get into better training facilities and higher education. Is that the focus?

PM: Of course, I think education and healthcare are prime imperatives as far as this Budget is concerned. Also we need to improve the skill level of the youth. Therefore we need lot more emphasis on secondary education, or on those who leave the primary education and at the same time, strengthening the vocationalisation of education. We need to expand the facilities that are available through the medium of ITIs. Finance Minister mentioned modernization of 500 ITIs. He also mentioned about 1400 additional ITIs which need to be modernized, i.e., the focus is on improving the skill level of our young people.

Source : Press Information Bureau