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Speech of Shri Yashwant Sinha
Minister of Finance
1. I rise to present the Budget for the year
1. Agricultural reforms have been inadequate and our agriculture continues to be subject to the vagaries of the monsoon. 2. Despite major industrial sector reforms, industrial growth has not accelerated to the double-digit level as expected. 3. Inadequate fiscal adjustment has remained the most intractable problem over the past decade.
1. Interest payments now constitute over 69 per cent of the Centres tax revenues.
2. Subsidies continue to increase to unaffordable levels and do not necessarily reach the deserving beneficiaries.
3. The pension liability of the Government is becoming onerous.4. Public investment in infrastructure and social sectors is inadequate due to falling total public sector savings.
5. Private investment is constrained due to high real interest rates and inadequate infrastructure.
6. Thus, despite the many achievements of economic reforms over the past decade, much remains to be done if we have to achieve our full potential. There is urgent need to further deepen reforms to set the stage for higher growth over the next decade. We have to intensify our effort in fiscal adjustment so that the generations to come are not burdened by our borrowing excesses. The economy has achieved significant acceleration in growth over the last 20 years. Our aspiration must be to achieve still higher growth in the next 20 years.
| 7. The broad strategy of the budget, therefore, with
this objective of growth in mind is to ensure:
1. Speeding up of agricultural sector reforms and better management of the food economy. 2. Intensification of infrastructure investment, continued reform in the financial sector and capital markets, and deepening of structural reforms through removal of remaining tiresome controls constraining economic activity. 3. Human development through better educational opportunities and programmes of social security. 4. Stringent expenditure control of non-productive expenditure, rationalisation of subsidies and improvement in the quality of Government expenditure. 5. Acceleration of the privatisation process and restructuring of public enterprises. 6. Revenue enhancement through widening of the tax base and administration of a fair and equitable tax regime.
Agriculture and Rural Development
8. As I have noted, reforms in the agriculture sector have been inadequate and must be speeded up. The Government has already announced the first ever National Policy in Agriculture.