Budget 2007 - A NOTE
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As P Chidambram was unfolding the Budget 2007 on 28th feb. , industries, corporate and academicians were keen to analyze the SWOT for their interest. It’s really a tough job to comment on annual budget of second largest growing economy of the world, that too in very brief and succinct manner. For corporate crunchers, here’s the news - E&Y has come up with 87 pages analysis report whereas their counterparts from KPMG, ICRA and CRISIL have tried to concise the report but couldn’t help and end up with 50, 17 and 8 pages report. But I am going to give you the hint and mood of the budget in extremely brief and terse way.
The Annual budget looks to have struck balance between fiscal consolidation and the need to spend, especially in key areas such as agriculture, the rural economy and social services.
Fiscal and revenue deficit, both come down from the previous FY and are 3.3 and 1.5 % of GDP respectively. Total spending in 2007/08 seen at 6.81 trillion rupees ($154.6 billion); non-plan expenditure next year seen at 4.35 trillion rupees.
Its matter of irony that just before the budget day the results of Punjab, UT and Mizoram legislative elections were declared and INC tasted defeat in the same. INC supremo blamed it to inflation rise and so the effect of this is clearly visible in the budget as she asked the Govt. to rein in the spiraling inflation. Leading the way is a reduction in customs and excise duties for a number of commodities. Notably the Agriculture sector is a key focus reflecting the sector’s central role and socio-economic-politco importance . Reforms have also got slow down because of Sonia influence. Tax exemption for some sectors have cut down too especially for IT and ITES sector.
On the other hand Govt. has increased the budget allocation for farm credit and education to name a few among other rural and social issues.
Bottom-line is policy making and budget allocation is good to priorities for key sector to maximize sustain growth, but effective implementation of policy and efficient use of allocated budget for the growth is the area to stress upon. Eleventh five year plan is to be start from this year and achieving the target is a challenge for the country.
The Annual budget looks to have struck balance between fiscal consolidation and the need to spend, especially in key areas such as agriculture, the rural economy and social services.
Fiscal and revenue deficit, both come down from the previous FY and are 3.3 and 1.5 % of GDP respectively. Total spending in 2007/08 seen at 6.81 trillion rupees ($154.6 billion); non-plan expenditure next year seen at 4.35 trillion rupees.
Its matter of irony that just before the budget day the results of Punjab, UT and Mizoram legislative elections were declared and INC tasted defeat in the same. INC supremo blamed it to inflation rise and so the effect of this is clearly visible in the budget as she asked the Govt. to rein in the spiraling inflation. Leading the way is a reduction in customs and excise duties for a number of commodities. Notably the Agriculture sector is a key focus reflecting the sector’s central role and socio-economic-politco importance . Reforms have also got slow down because of Sonia influence. Tax exemption for some sectors have cut down too especially for IT and ITES sector.
On the other hand Govt. has increased the budget allocation for farm credit and education to name a few among other rural and social issues.
Bottom-line is policy making and budget allocation is good to priorities for key sector to maximize sustain growth, but effective implementation of policy and efficient use of allocated budget for the growth is the area to stress upon. Eleventh five year plan is to be start from this year and achieving the target is a challenge for the country.
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