India’s government has unveiled its
annual budget, saying that the economy is expected to grow at 9 per cent in
Finance Minister Pranab Mukherjee
said the growth rate for the current fiscal year was projected at 8.5 per cent.
He said inflation would decrease
over the next fiscal year – the current rate is 8.4 per cent. But food price
inflation, at 17 per cent, “remains a concern”.
Mr Mukherjee promised action on
food security and pledged an increase in social spending.
“The country has carried for
long enough the burden of hunger and malnutrition,” he said.
The finance minister said a food
security bill, which will guarantee cheap food to the poor, would be introduced
into parliament soon.
He also announced a substantial
increase in funds for education and health. Social spending funds are also set
to increase by 17 per cent.
Funds for health and education have
risen to $5.9 billion.
The budget deficit has reduced to
5.1 per cent of GDP this fiscal year, down from more than 6 per cent. The plan
is to cut this to 4.6 per cent next year.
Mr Mukherjee also announced a $22
million fund to help the struggling micro finance industry which is facing a
liquidity crisis after borrowers in parts of India stopped repaying loans.
He said the government’s
performance in handling the economy was mixed.
“While we succeeded in making
good progress in addressing many areas of our concern, we could have done
better in some others,” Mr Mukherjee said.