Indian Finance Minister Yashwant Sinha on Sunday, January 7, said the annual budget next month will aim to kickstart growth through a host of measures to boost foreign and private investments.
Sinha told the Press Trust of India the budget will seek higher investments in infrastructure such as roads, ports, airports, telecommunications and power.
It will also attempt to slash red tape by pruning the size of the government.
"When I say the budget will be growth-oriented, precisely what I have in mind is that we must have a kind of regime that will spur demand and investment," Sinha said.
The finance minister dismissed criticism of a slowdown in the economy, saying economic growth had lost steam primarily due to higher global oil prices and a sluggish manufacturing sector.
"The point I want to make is we are not in a crisis situation. Only in certain sectors of industry there has been a slowdown.
"The performance of the Indian government has to be judged not in the context of this slowdown, but on the basis of the response of the government to the emerging situation."
Prime Minister Atal Behari Vajpayee recently conceded that economic growth for the year ending March 2001 would be about one percent lower than the government target of seven percent.
"Given the very difficult situation I would personally think any growth rate above six percent this year should be considered satisfactory and creditable," Sinha said, adding that Vajpayee has set a target of nine percent annual growth for the next 10 years.
"We have not yet gone into the arithmetic of it, but the idea is we will have to put forth a policy framework for a higher growth in the medium term."
Sinha said the task of deepening the economic reforms was bound to be gradual because of divergent political opinions on the manner of implementing the liberal policies.
"We are trying to achive reforms of the economy in a highly active, vibrant and almost often contentious democracy," Sinha said.
He said the budget would also give priority to widening the tax base, while clamping down on government borrowing.
Sinha said despite greater pressure from states for funds, the federal government would be able to achieve the fiscal deficit target of 5.1 percent in the year ending March 31, 2001.—(AFP)
© Agence France Presse 2000
© 2001 Mena Report (www.menareport.com)
