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BW Businessworld

Govt To Hike Spending...

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Finance Minister Pranab Mukherjee, presenting the 2009/10 federal budget, said it was possible that the two worst quarters since the global financial crisis hit "are behind us".

Mukherjee also pledged to return the country to a high growth rate of 9 per cent a year as soon as possible, from an estimated 6.7 per cent in 2008/09, and said the government would return to fiscal responsibility targets "at the earliest".

India is expected to raise its borrowing target to $82.6 billion for fiscal 2009/10 in a budget on Monday, about 9 per cent above the borrowing target set in an interim budget five months ago.


Infrastructure Spending
# allocations for national highways, urban renewal to rise sharply
Energy Sector
# to develop long distance natural gas pipelines for a national grid
# to set up panel to review doemstic fuel prices

Agriculture Spending
# to provide additional 10 billion rupees over interim budget for more irrigation
# to offer direct subsidies to farmers

# 2008/09 GDP growth seen at 6.7 pct; government aims to return economy to high growth path of 9 pct/yr at the earliest;

"By pushing banks to lend aggressively to farmers, we can expect increase in productivity of agricultural produce. With incentives for exporters, export-oriented commodities like cotton and spices may rule firm."
-Harish Galipelli, head of research, Karvy Comtrade, Hyderabad

"The announced higher allocation for irrigation sector is too little as 60 per cent of the country's farm land is still rain fed. We expected more."
-Krishna Bir Chaudhary, president of Bharatiya Krishk Samaj, New Delhi

# India shares fall 1.9 per cent as budget unfolds on concerns over how government will fund growing deficit
# Partially convertible rupee slips to 48.24/26, versus 47.88 before the budget speech began and compared with Friday's close of 47.89/91.