Accent on growth in Budget, says Sinha

Accent on growth in Budget, says Sinha
PRESS TRUST OF INDIA

New Delhi, Jan 7: Finance Minister Yashwant Sinha said next month's budget will spur demand and boost investment but will not include tax cuts, a PTI report said on Sunday.

Sinha said the budget would outline a medium-term strategy to spur growth, push up investment in infrastructure and agriculture and downsize government.

"When I say the budget will be growth-oriented, this is precisely what I have in mind that we must have a kind of regime that will spur demand and investment," PTI quoted him as saying. He did not give further details.

But Sinha ruled out the possibility of a cut in direct tax rates, saying industry had several exemptions and reliefs.

Sinha is scheduled to present the budget for 2001-02 in late February.

Prime Minister Atal Behari Vajpayee asked Sinha to prepare a growth-oriented budget aimed at halting the industrial slowdown, led by problems in the manufacturing sector.

The government had set a target of more than seven per cent gross domestic product (GDP) growth at the start of this year, but that was scuttled by a steep rise in global oil prices and the sluggish manufacturing sector.

Most economic forecasters lowered initial growth forecasts and now expect the country to end the year with a growth of around six per cent. India's GDP grew 6.4 percent in 1999/2000.

Sinha said he expected GDP growth of 6.5 per cent in2000-01 and a fiscal deficit at the budgeted level of 5.1 percent of GDP.

"Given the very difficult situation, I would personally think any growth rate above six per cent this year should be considered satisfactory and creditable," he was quoted as saying.

The Finance Minister said the ongoing economic slowdown was not a crisis situation and the problem was restricted to the manufacturing sector, particularly capital goods.

"The point I want to make is we are not in a crisis situation," he said.

Later, Sinha said the farm sector in the country has been given top priority since the Vajpayee-led NDA Government came to power.

Distributing Kisan credit cards to farmers at Ranga Reddy district about 20 kms from here, Sinha said so far 90 lakh farmers have been covered under the scheme and was expected to reach 1.25 crore by March this year.

He said the liberal financing scheme to the farmers has paved the way for extending the facility to farmers of the country and advised the farmers to avail and repay this benefit.

Calling upon the bankers, the Minister asked them to conduct survey and identify areas and fields for financing in rural areas in alleviation of poverty.

Appreciating the Andhra Pradesh Government for its innovative schemes for upliftment of rural economy, Sinha asked other state governments to emulate and implement schemes and assured the Union Government's help in this direction.

Uniom Rural Development Minister M Venkaiah Naidu urged the banks to come forward and simplify the procedures for the farming community.

Union Minister of State for Urban Development Bandaru Dattatreya complained that due to banks stipulated norms for collatoral securities the government could not release a sum of Rs 470 crore last year as margin money to the beneficiaries.

The state level bankers' committee of Andhra Pradesh which organised the programme also launched Kisan Chakra scheme to finance two wheelers to farmers.