Indian Budget 2006-07- Full Text
Full Text of P. Chidambaram, Minister of Finance, Budget Speech(Feb 28, 2006)
I AN OVERVIEW OF THE ECONOMY
2. Twenty months ago, when I presented the first Budget of the UPA Government, I asked Honourable Members – and the people of this country – to walk with us on the path of honour and courage. The final report card on the first year of the UPA Government is out, and there are reasons to celebrate. According to the Central Statistical Organization (CSO), the growth rate in 2004-05 was 7.5 per cent, with the manufacturing sector growing at 8.1 per cent. More importantly, at current market prices, gross domestic saving increased to 29.1 per cent of GDP and the rate of gross capital formation increased to 30.1 per cent of GDP. I have no doubt in my mind that these results were due to the political message conveyed by the National Common Minimum Programme (NCMP); the perceptive leadership of the Prime Minister, Dr. Manmohan Singh; the policy changes made by the Government; and the palpable confidence of the Indian people that their future is in safe hands.
3. I am happy to report that the prospects for 2005-06 are just as good, if not better. This year can be characterized as the best of times and the worst of times. Nature has not been kind to us. Natural calamities took a heavy toll on human lives besides causing extensive damage to crops, roads, houses, and the infrastructure. Government provided immediate interim relief; this was followed by releases from the CRF and NCCF totalling Rs. 5145.37 crore to date. Obviously, this assistance will not be enough. The Planning Commission will draw up a programme for rebuilding the damaged infrastructure, and I wish to assure the House that the Government will provide the money for rehabilitation and reconstruction.
4. It was also the best of times. Government has been able to fulfil the first NCMP obligation of ensuring a high growth rate. According to the CSO’s advance estimates, GDP growth is likely to be 8.1 per cent this year, with the manufacturing sector expected to grow at 9.4 per cent. Agricultural growth has bounced back to 2.3 per cent and, barring mining, all other sectors are performing satisfactorily. Inflation, as on February 11, 2006 was 4.02 per cent. Non-food credit is growing by over 25 per cent. A large part of the credit goes to our farmers, workers, service providers, traders and business persons, and I would urge the House to join me in saluting them.
5. The assault on poverty and unemployment continues. I believe that growth is the best antidote to poverty. The GDP growth target for the Tenth Plan was set at 8 per cent. Thanks to three years of 7.5 per cent plus growth, it is possible that the overall growth rate will be 7 per cent. In recent speeches, the Prime Minister has raised the bar to 10 per cent, and the Government is determined to take the country to that high growth path. Growth will be our mount; equity will be our companion; and social justice will be our destination.