Union Budget 2009-10
- A Favorable Budget for Common Man -
- Part 1 -

G S Oinam *

UPA's Aam Admi Budget 2009-10 with special focus on rural infrastructure, employment, agriculture, education etc. aim to regional balance growth and economic stabilisation has many criticisms from tax payers. Power, electricity and urban development are directly hit to tax payers and quick return; therefore, tax payers enjoy benefit.

Rural development has little impact to tax payers and investment return benefits are slow. Last interim budget 2008-09, focus on rural development and agriculture had also many criticisms from tax payers, market experts and economic analysis etc.

In this budget 2009-10, Market analysis has many criticisms following with stocks market crash. Interestingly, stocks market was highest point value when UPA II came to power and sharp decline at the time of budget speech. UPAs agenda for Aam Admi had already been announced before election.

It is a hard bargaining from tax payers to review the taxation policy in favor of their trade benefits and expansion. Therefore Ups and Down of share market should not have any impact to the budget.

Every plan budget has a special focus or model because of one budget can not fulfill the all problem of economy. However, an appropriate taxation and monetary policy, disinvestment and divestment policy, FDI policy is required for immediate returns of investment benefit as well as quick recovery of fiscal deficit.

Experts has some worry about the nature of government borrowing programme and its impact on interest rate and role of private investments and the nature of programme implementation and monitoring. Even Insurance sectors are expecting exemptions and benefits for insurance premiums or separate section in Section 80C, so that it could have provided a boost for long term investments like life insurance of India via rationalization of tax regime.

Like wise, a real estate developer has many demands, lawyers' strikes over service tax and correction of gold prices and tax cut etc. etc. Government confidence and long term roadmap of fiscal consolation is waiting by the experts. Stocks market plays an important role to face value of rupees in case of deficit finance budget; however, Indian economic policy should not hit directly by FDIs and share brokers.

Democracy is the art and science of mobilizing the entire physical, economic and spiritual resources of various sections of the people in the service of the common good of all. One Budget speech won't address all the problems the economy faces. In the last one month, there has been a lot of hype.

"I have provided necessary relief to each sector. We have also provided support wherever needed", Shri Pranob Mukherjee, Finance Minister said. The budget is based on mid term projections (1st phase of phase III). Special emphases has been given to rural infrastructure, enhancement to social sectors, education, agriculture and increased in investment.

Some of the important monetary and fiscal reforms are fringe- benefit tax abolished, tax holiday to exporters' etc. Fiscal deficit to 6.8 % and economic growth targeted 9%, growth rate to the end of financial year will not be less the 7%.

This Budget focus on skill development mission, 12 million jobs creation in a year and divestment will be done and it is a process not an event. Now, people will get more money in hand and it will encourage spending more (purchasing power) on consumer items and saving as well. Consumers' goods and domestic product will be boom.

Foreign Direct investment (FDI) on consumer goods will be profitable and will flow in. North Eastern Ministry (DONER) will get 10% over head of various ministries new project / scheme for infra structural development in NE. Prime Minister Dr. Manmohan Singh and Bangali Babu Shri Pranab Mukherjee, FM can do anything changes. This is a favorable Budget to North east and common people (Aam Admi).

Back Ground

The word Budget was derived from the Middle English word bowgette, which came from Middle French bougette, which in turned is a diminutive of bouge, meaning a ' a leather bag'. On Nov26, 1947, RK Shanmukham Chetty had presented the first Budget of Independent India. But actually it was a review of the economy and no new taxes were proposed as the Budget day for 1948-49 was just 95 days away.

The decision to set up the planning Commission to review the existing programmes of development and schemes of production came in the 1950-51 budgets. The first report of the commission came following years, and the first Five year Plan in the next.

Since then, Five year plan model budget introduced with special emphases on infrastructure, agriculture, heavy machinery, industries, fiscal and monetary policy etc. etc. for every five year.

In 1953-54, a group of technical experts from the International monetary fund (IMF) came on the agency's first Five year Plan as well as fiscal, economic and monetary policies. Demands for grants for various ministries submitted for the first time in 1959-60. The document shows their expenditure requirements, separately, a practice that continues to this day.

P. Chidambaram rewrote India's export –import (Exim) policy in one non stop eight hours sitting in July 1991 when he becomes commerce minister. Five years ago the people of India had vote for chance. In the word of Prime Minister, Dr. Manmohan Singh, people had sought 'a change in the manner in which this country is run, a change in the national priorities and a change in the processes'. This year budget 2009, has emphases on rural infrastructure, agriculture etc.

Initially, Budget papers were printed in Rastrapati Bhawan. But in 1950, the budget papers were leaked. Thus, the printing venue was shifted to security press located in Minto Road, New Delhi.

However, since 1980, the budget papers are being printed in North Block. There is a special printing press in the basement of the North block to print the Budget. The employees printing the budget papers are kept in complete isolation (quarantine) in the finance ministry for one week before the Budget.

Budget at a Glance:

Apart from Bharat Nirmal and nine flagships schemes, newly introduce attractive schemes in this Budget are Pradhan Mantri Ardarsh Gram Yojna (PMAGY ), a pilot project to provide financial assistance to fight rural poverty in schedule cast 50% population villages for Rs 10 lacs over and above the allocations under Rural development and Poverty Alleviation Schemes.

National Rural Livelihood Mission to make it universal in application focused to eradicate poverty by 2014-15, providing bank linkage to women self help groups (SHG).

National mission for female literacy, with focus on minorities, SC, ST and other marginalised groups. The aim will be to reduce by half, the current level of female literacy, in the three years. Another feature of the budget for the social security of the workers in unorganized sector is that social security schemes for occupations like weavers, fishermen and women, toddy tapers, leather and handicraft workers, planters, bidi workers, and rickshow puller are implemented at the earliest.

Necessary financial allocations will be made for these schemes. Employment exchange will be modernized that a job seeker can register on line from any where. A national web portal with common soft ware will be developed in this regard. This budget has increase 74% for minorities welfare i.e. Rs.1740 crores has been allotted.

Students of weaker section will get full interest subsidy bank loans during the period of moratorium. It is estimated that over 5 lacs students would avail of this benefit. Government has proposed to launch Massive programme of housing to create 1 lakh dwelling units for central Para military forces personnel and increased pension money for ex service man.

The National Action Plan for Climate Changes and Unique Identification Card to citizen are major challenges of the new UPA. Government has announced National food Security Act; to ensure that every family living below poverty line in rural or urban area will be entitled by law to 25 Kilos of rice or wheat per month at Rs.3/-.

Further, the new budget targeted agricultural credit flow to 3, 25000 crores for the year 2009-10 at an interest rate of 6% per annum and debt relief for farmers extended for 6 months.

Government intends to move towards a nutrient base subsidy regime on fertilizers instead of current product pricing regime amount to Rs66537 crores in 2009-10. Petroleum and Diesel pricing policy will be announce soon and PSU disinvestment programme will be encourage to 51% government equity.

.....To be continued......