The Hindu Business Line : Contouring new growth paradigm

INDIA now has the potential to grow at a high trajectory and change the destiny of over a billion people— one-sixth of humanity. This calls for unleashing productive energies, creating a new paradigm for economic growth, including all sections of society in the process of growth and encouraging productive enterprises to attain global leadership. The Union Budget 2005 admirably addresses these imperatives. It is a statement of what India can aspire and achieve.

The Finance Minister, Mr P. Chidambaram's remarkable success in bringing down fiscal deficit and the reaffirmation to eliminate revenue deficit by 2009 show the government's commitment to prudent fiscal management.

There are several measures that aim at unleashing productive energies of the economy. Stimulating investments, catalysing infrastructure development, improving credit flow, reducing the cost of financial intermediation, developing corporate bond markets and securitising gold are significant initiatives.

The Budget incorporates significant support to a spectrum of infrastructure domains — from agriculture, post-harvest facilities, irrigation, water supply, housing, rural electricity, rural roads, urban transportation to telecom connectivity. These are areas that underline the enormous latent productive energies in the economy. Sizeable increases in budgetary allocation for education, skill development, rural health, integrated child development, drinking water, sanitation and poverty alleviation imply the building of greater human capacity and productive capabilities.

A new paradigm of growth has been contoured, based on encouraging employment-intensive growth sectors, greater access to foreign capital, transitioning from small to medium size enterprises and encouraging exports.

The Budget endeavours to include all sections of society in the process of socio-economic growth.

A remarkable feature of the Budget is the endeavour to reach out to a cross-section of Indian society, especially the less-privileged — farmers, weavers, children, students, minorities, women and senior citizens. It is a recognition that these sections of Indian society have to be part of mainstream socio-economic processes. India's determination to move towards global leadership comes through clearly in the Budget.

Providing for world-class universities, improving manufacturing competitiveness, garnering a greater share of world trade and developing Mumbai as a financial hub in this part of the world are reflections of global aspirations.

Addressing diverse socio-economic imperatives in a financial resource-constrained economy is not an easy task. The temptation is to tax more. The Budget has stayed away from this course.

It has enabled social imperatives through greater resource generation with admirable finesse, by banking on buoyancy in the economy. It also strives to restructure expenditure and measure outcomes with caution.

In essence, Union Budget 2005 steps out of the portals of financial planning in governance to forging a future for India founded on enterprise and equity.

(The author is Chairman and Managing Director, Reliance Industries Limited.)

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