Union Budget 2009 -2010
The 2009 Indian Budget is a “welfare” budget, to bridge the gap between “India” and “Bharat.” It is also an attempt to stimulate spending by the reduction of direct taxes. The 10% surcharge has been scrapped for those who earn Rs 10 lakhs and above per annum and it is a bonanza of sorts.
The total budget expenditure for 2009-10 is high, Rs 10,28,032 crore, and the fiscal deficit in 2009-10 will be 6.8 per cent of GDP.
- More money for Defence and also for modernizing the police machinery. Also construction of fences, roads and flood lights on the international borders
- Higher Pension for non-commissioned officers
- To meet energy needs, the development long distance natural gas pipelines for a national grid and increased allocations under the Accelerated Power Development and Reform Programme (APDRP)
- Emphasis on higher education with Rs 2,113 cr for IITs and NITs, Rs.827 crore for Central Universities in certain states and provision for setting up and up-gradation of Polytechnics under the Skill Development Mission. There will be Higher Education loans for the poor
- National Mission for Female Literacy to be launched with focus on minorities, SC, ST and other marginalized groups
- Roads and highways and other infrastructure to be built
- Fund allocation for urban poor, with slum development schemes and provision of facilities.
- And Mumbaikars can look forward to the completion of the Storm Water Drainage Project to solve their flooding problems
- More Agriculture credit
- Rs 2,000 cr for rural housing fund
- More money for the National Rural Health Mission (NRHM)
- All BPL (Below Poverty Line) families to be covered under Rashtriya Swasthya Bima Yojana (RSBY), a health scheme
- Fertilizer subsidies
- Soft loans and debt relief for farmers
Some Aims of the Budget:
- Return to 9 per cent growth from the present 6.7 per cent
- Create millions of urban jobs and also rural employment opportunities
- Integration of Indian economy with rest of the world
- Hike infrastructure investment to over 9% of GDP by 2014
- Move towards energy security
- Expand banking network
- Subsidised food under the National Food Security scheme
- Decrease female illiteracy by fifty percent
- Raise money from stake sales in some PSUs
- Encourage people’s participation in disinvestment programs
- Keep public sector banks and insurance companies in the public sector and give them full support, including that of capital
The complaints against the budget are that there is no actual disinvestment plan in motion, that there are very few sector specific incentives, and some sectors like the hospitality and travel industry have been completely neglected. There is also criticism that the expenditure is too high, and the resultant fiscal deficit can become a problem.
Well, everything cannot happen at once. In any case everything doesn’t have to happen during budget time. Take the petrol hike. It was done separately from the budget. Other plans like disinvestment plans will roll out slowly in the years to come with discussion and agreement with opposition parties. At present the Congress cannot go about it alone.
What seems exciting is the Food Security Bill that will ensure that every BPL family gets 25 kg of rice and/or wheat at Rs 3 per kg. This means that one day soon India can hold up its head proudly and say that no Indian is starving. However, no money has been allocated in this budget for the scheme but then again, the budget isn’t the only time when this can be done. The government has not worked out the details of this scheme but a key element of this seems to be making identity cards for all citizens. Once this is in place it will improve the delivery system for all welfare schemes. A 1989 Planning Commission study mentioned that only 15 paise of a rupee spent reaches the poor as 85 paise is lost in establishment costs and leakage. Some states do have identity cards for the poor but these are believed to have been tampered with. In fact some states have more cards than people! Hopefully Nandan Nilekani will do a good job and ensure that the right people get the right cards.
Besides the subsidised food, I think the government needs to roll out some sort of nutrition education as well.
It was disappointing that nothing seems to have been mentioned for the upgradation of primary education in India. I feel this is more important than higher education. Sure, we do need universities but we also need quality people to be able to get into them. Right now all that the government seems to be doing is open more schools. We need to improve the quality of existing schools on a priority basis.
Related Reading: India’s rising defence expenditure is not too high if compared to that of other countries
Taxes on petrol and diesel very high in India
India Budget 2008
Growth is not leading to development in India
More Reading on The Economy
Primary and Secondary Education