|Opposition frowns on self-serving India interim budget
India's finance minister unveiled a restrained mini budget for the government's remaining months in office, saying the deficit has narrowed. But the opposition slammed it as a “farewell,’’ budget.
“This budget is practically a no budget. This is a farewell budget of a government which has lost on all counts. Not to highlight their [government] failures, he [finance minister P Chidambaram] is hiding behind the figures of percentage of world economies," BJP spokesperson Prakash Javadekar said.
Palaniappan Chidambaram said government finances are in better shape than a year ago, with a projected budget deficit of 4.6 percent of gross domestic product for the financial year ending March 31, lower than the target of 4.8 percent.
He also predicted that the deficit would shrink further to 4.1 percent of GDP by March 2015. India's elections are due by the end of May.
The finance minister had to raise his voice to be heard over arguments and heckling from lawmakers angered over a long-contentious proposal to create a new southern state. The impassioned debate turned into mayhem last week. One lawmaker unleashed pepper spray in the parliament.
Chidambaram said higher duties on gold imports have helped narrow the current account deficit by almost half to a projected US$45 billion by the end of March.
The economy is also starting to grow faster, Chidambaram said, predicting third and fourth quarter growth of 5.2 percent. After years of economic expansion averaging 8 percent, India has sputtered in the past year, with growth sinking to a decade low of 4.5 percent in the April-June quarter of 2013.
Chidambaram used the budget as an opportunity to portray the government as a responsible steward that made tough decisions to restore stability and put the economy back on track.
“The fiscal deficit is declining, the current account deficit has been contained, inflation has moderated, the quarterly growth rate is on the rise,'' he said.
Chidambaram outlined a budget of 5.6 trillion rupees (US$90.4 billion) for the April- June quarter, which included a 10 percent increase in defense spending.
Total government subsidies in areas such as food and fuel would remain steady.
Plus, the budget gave temporary cuts in excise taxes on capital goods from 12 percent to 10 percent and automobiles and motorbikes from 12 percent to 8 percent in a bid to spur investment and consumer spending.
The interim budget also extended a temporary tax raise for the “super rich'' intended to bring more money into the state coffers. People with annual income over 10 million rupees (US$186,000) were originally to pay the additional tax for one year.-- AP/The Standard