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PM says Budget focus on next reforms wave
January, 08th 2010

Its quite certain now that the Union Budget for the year 2010-2011 will be reform-oriented.

Prime Minister Manmohan Singh, in his meeting with the Planning Commission members on Wednesday, is learnt to have focused on the need for introducing the next phase of economic reforms in the 2010-11 Budget.

The UPA-I regime had failed to introduce big-bang reforms due to resistance from its Left allies at that point.

Based on the PMs guidance, the Planning Commission is all set to prepare a reform roadmap, which is likely to reflect in the Budget proposals of the UPA-II government end of February.

The PM is of the view that this is the right time to catch up with China, for which the government will have to usher in the second phase of economic reforms, with special focus on banking, insurance and foreign direct investment, a member of the Planning Commission told DNA.

Besides banking and insurance, return to the 9-10% growth path is expected to top the reform agenda.

Other issues which are likely to find place in the reform Budget include fast-pace divestment of public sector enterprises, containing the steep fiscal deficit that the country faces now, highlighting the measures to reach the path of fiscal consolidation, introduction of goods and service tax, and rollout of the direct tax code.

The finance ministry recently revised its estimates for GDP growth for the current financial year, after the Index for Industrial Production (IIP) grew by 10.3% in the month of October 2009.
However, this growth was way below the 19.2% industrial output growth reported by China for November.

Only last week, finance minister Pranab Mukherjee said that the GDP growth for the current year could touch 8%, revising the earlier government estimate of 7.75%. Mukherjee also said, the target of growth of 9 to 10% is now within our reach and we shall have to achieve it.

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