Budget 2015: Government has embraced states as equal partners of growth, says FM Arun Jaitley
NEW DELHI: Stating that the NDA government has embraced states as equal partners of growth, Finance Minister Arun Jaitley in his budget speech said, "Every rupee of public expenditure, whether by centre or states will contribute to betterment of people's lives."
Stating that Budget 2015 comes in the backdrop of a better growth environment than in the past, Jaitley on Saturday said, "World predicting that it is India's chance to fly."
"India is going to take off on a faster growth trajectory." "While global growth forecasts have come down, India's forecasts have either been maintained or scaled up," Jaitley said in his Budget speech.
On Friday, an upbeat Economic Survey penned by Chief Economic Advisor Arvind Subramanian said that India is headed for 8%-plus growth next year and on course for 10% expansion in the near future.
But, equally significantly, the survey argued against over-emphasis on "big-bang" reforms, saying the most effective policies are often those that provide many small solutions.
In this, Subramanian seemed to speak the economist's version of Prime Minister Narendra Modi's political-economy argument.
Growth prospects have improved, the survey says, putting aside questions about the reliability of the new GDP numbers with the base year of 2011-12.
New political authority, reforms, low inflation thanks to a global commodity price slump leading to low interest rates, and the prospect of a good monsoon are together likely to accelerate India's growth rate to 8.5%.
The government has some room for fiscal activism but should meet its target of containing fiscal deficit at 4.1% of GDP in FY15 and stick to the path of fiscal consolidation in the years ahead. This would mean compressing expenditure quite a bit, and stepping up capital expenditure by cutting down on consumption expenditure.