New Delhi:
Finance Minister P. Chidambaram today prefaced his much anticipated budget 2013 proposals by spelling out what he called his government's mantra - "higher growth leading to inclusive, sustainable development."
Budget 2013-14 caps an intensive seven-month campaign by the energetic Mr Chidambaram, who was appointed last August, to turn around the fortunes of Asia's third-largest economy after years of policy drift and global economic turmoil.
Mr Chidambaram said the growth rate would be below the potential growth rate of 8%, but there was no reason for gloom and pessimism. "In 2013-14 if we grow at the rate projected, only China will grow faster than India,"Mr Chidambaram said, underscoring that India was not immune to the global slowdown.
Right at the beginning of what he promised would be a "simple, short and straightforward speech, Mr Chidamabaram set the tone for what is expected to be a balancing act of austerity to stave off a damaging credit ratings downgrade, and the fact that this is the last full Budget his government presents before elections next year.
He emphasised on the need to narrow fiscal and current account deficits and made clear that there was no "choice between welcoming and spurning foreign investment; it is an imperative."
Mr Chidambaram reached Parliament today a little after 10 to head into a Cabinet is meeting to have his Budget approved. Before that, the Finance Minister met President Pranab Mukherjee this morning to brief him on the key features of the Budget, his eighth.
He is expected to announce plans to keep a lid on government spending in fiscal 2013-14, capping it at roughly the same level as the year ending next month, officials told Reuters, despite fears that lower public expenditure risks deepening India's sharpest economic downturn in a decade.
Economists say he may also unveil measures to widen the tax net to boost government revenues, lay the groundwork for a goods and services tax, reduce the government's huge subsidies bill, sell more stakes in state-owned enterprises and raise import duties to dampen demand for gold.
Investors will watch closely to see whether the three-time finance minister will fulfil his promise of fiscal prudence or sow the budget with vote-winning, but expensive, welfare handouts.