The Hindu Business Line : Towards prosperity

In an environment of economic challenges and exceptional expectations, the Honourable Finance Minister has demonstrated characteristic steadiness in presenting the Union Budget 2009. With a promise to include all sections of society in the country’s growth, the budget sets some stellar long-term development goals.

The first is the recognition that sustained and sustainable economic growth is the bedrock of development.

This desire for inclusive growth is surely behind the increased outlays for initiatives such as the NREGA scheme, rural housing and village development. Combined with higher spending on urban development and infrastructure, they will provide a crucial stimulus to the economy.

By focusing on both industrial and agricultural growth, generation of employment and poverty alleviation, development of infrastructure as well as social services such as health and education, the Finance Minister has designed a sound and sustainable way to achieve national growth.

That the budget has done this without raising taxes — indeed scrapping many of them, such as the Fringe Benefit Tax and Commodities Transaction Tax — is praiseworthy. While managing the rising fiscal deficit and, perhaps later, inflation could be a challenge, the Minister has taken some steps towards a solution. His decision to simplify tax procedures and structures is productive, and the planned new Direct Tax Code — to be unveiled in 45 days — should raise collections. The incentives for investors in infrastructure, education, social security and energy security should also boost these sectors and raise receipts. The visionary decision to move towards a market pricing regime for petroleum products, and from a product-based fertiliser subsidy mechanism to a nutrient-based one should also increase India’s economic efficiency.

I also applaud the Finance Minister’s embrace of technology to bring transparency and efficiency to the administration of Government projects and schemes.

This Government’s greater vision for a new India is also exemplified by projects such as the unique citizen number identification plan, a pan-India virtual employment exchange, a national gas grid and central universities in every State.

There is no doubt that these measures will propel India into a higher growth orbit while ensuring the fruits of development are spread more evenly across all sections of society.

I believe the Union Budget 2009 is a crucial step in the foundation on which we will build a progressive and prosperous India.

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