Monday, Pranab Mukherjee, Minister for External Affairs and a former Finance Minister and, now holding additional charge of the Finance portfolio, in his interim budget proposals for fiscal 2009-10, indicated that additional plan expenditure of anything from 0.5% to 1.0% of the GDP will need to be considered in the regular budget, to be presented by the next ministry after the general elections.
He said the budget for the fiscal year 2010 will have a total expenditure of Rs.9,53,231 crore, comprising Rs.2,85,149 crore under Plan and Rs.6,68,082 crore under non-Plan. The gross budgetary support for the Plan is 17.16% higher than that in 2008-09.
Gross tax revenue receipts at the existing rates of taxation are estimated at Rs.6,71,293 crore and the Centre's net tax revenue at Rs.5,00,096 crore. With revenue expenditure estimated at Rs.8,48,085 crore, the revenue deficit amounts to 4% of GDP. The fiscal deficit is estimated at Rs.3,32,835 crore, which amounts to 5.5% of GDP. This would be lower than in 2008-09, but higher than would be appropriate under normal circumstances.
The minister, however, explained that conditions in next fiscal are not likely to be normal and, therefore, the high fiscal deficit is inevitable. It was proposed to return to Fiscal Responsibility and Budget Management or FRBM targets, once the economy is restored to its recent trend growth path.
The government has proposed Rural Infrastructure Development Fund-XV or RIDF-XV with a corpus of Rs.14,000 crore and continuation of the separate window for rural roads to ensure continuity in the financing of rural infrastructure projects.
The in-charge Finance Minster said that interest subvention of 2% on pre- and post-shipment credit for certain employment-oriented sectors has been extended till September 30 this year to counter any negative impact on exports on account of the continuing global financial crisis. This is expected to involve an additional financial outgo of Rs.500 crore during the fiscal year 2010.
A provision of Rs.100 crore has been made for setting up of Unique Identification Authority of India. This is being set up under the aegis of the Planning Commission, will put in place in comprehensive system of unique identity for residents of the country.
It was proposed to re-capitalize the public sector banks over the next two years to enable them to maintain Capital and Risk Weighted Assets Ratio or CRAR of 12% and to ensure that credit growth continues to sustain economic growth.
The allocation for defense is being increased to Rs.1,41,703 crore, which includes Rs.54,824 crore for capital expenditure.
A provision of Rs.95,579 crore for major subsidies including food, fertilizer and petroleum has been proposed.
An allocation of Rs.131,317 crore has been proposed during the fiscal year 2010 for various flagship programmes.
Social Sector
Pranab Mukherjee announced that two new schemes, Indira Gandhi National Widow Pension Scheme and Indira Gandhi National Disability Pension Scheme are being launched in this year to provide pension to widows and severely- disabled persons respectively. He also proposed to give priority to young widows in admission to it and to provide stipend and bear training costs.
Growth Trend
He said the Gross Domestic Product or GDP for 2008-09 was at 7.1%, despite the global financial crisis and the per capita income grew at 7.4% per annum for four years. The country has witnessed sustained growth of 9% in the last three years.
Agriculture
The Minister said that the Plan allocation for farm credit rose 300% in the last five years and the credit disbursement to the farm sector was around Rs.2.5 lakh crore in 2007-08. He added that the Government would continue to provide interest subvention to ensure that farmers would get short-term crop loans up to Rs.3 lakhs at 7% per annum.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.