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  #1  
Old May 18th, 2009, 04:32 AM
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Will budget 2009-10 will be affected over the wins by UPA in lok sabha election india

Now after high volume win by UPA in lok sabha election india result its time to Budget 2009-10 declaration .Active Finance minister Pranab Mukherjee claimed in Parliament that every effort has been made to fulfil promises made to the common man. FM efforts can make good progress in following sector......

Agriculture
Education
Social sector
financial Sector reforms
Tax effort
Administrative reforms
revised estimates
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  #2  
Old May 18th, 2009, 04:36 AM
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Re: Will budget 2009-10 will be affected over the wins by UPA in lok sabha election i

Did you look at the fiscal deficit of our country recently? Kangress has spent so much that analysts are worried that fiscal deficit is going to affect the economy even after global recession lifts. All these social engineering programs have yielded little while blowing away the fiscal well being of the govt. I dont know where Kangress will bring money to fulfill their poll promises now!
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Old May 18th, 2009, 04:45 AM
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Re: Will budget 2009-10 will be affected over the wins by UPA in lok sabha election i

more on fiscal dificit control:

Quote:

Centre needs to act fast on fiscal balance

18 May 2009, 0342 hrs IST, KG Narendranath, ET Bureau

NEW DELHI: The second Manmohan Singh government will have to sedulously work towards reversing the recent shift from a somewhat balanced to an expansionary stance on fiscal policy and spell out a new fiscal consolidation plan—something of a Fiscal Responsibility and Budget Management Act-II (FRBM-II) – by September-October when the economy would hopefully show definite signs of revival.

In the meantime, it will have to make use of a fiscal space of around 2% of GDP allowed by the fall in global commodity prices (and the resultant lowering of the subsidy burden on the centre) for providing one more measure of fiscal stimulus to the economy and assist the revival.

In doing so, the government would keep this year’s deficit level roughly at the level of last year’s-- the combined budgeted fiscal deficit of the centre and states at around 11% of GDP. If off-budget items – fertiliser, oil and food subsidies – are included, then also the total deficit would be roughly the same as last year’s as a fraction of GDP —close to 13%.

Of course, this is a very high level of deficit. To run such a high deficit for two years in a row is ominous for a country that was not able to bring down its debt burden despite five year’s of fairly successful fiscal consolidation efforts.

But in these exceptional times, none would seriously denounce such transitory flexibility of fiscal policy for which there are plenty of examples around the world. Mindful of the present situation, even the IMF has said "forceful counter-cyclical fiscal and monetary policies" would need to be sustained in the short term. What’s important is to ensure that this calibrated slippage on the fiscal front doesn’t go waste.

An average GDP growth of around 7.5% over five years starting this fiscal is essential for the economy to rebound and produce revenue buoyancy of the kind needed for the whole game plan to fructify.

It may be noted for the five years up to 2007-08, revenue buoyancy had tremendously helped the central government as well as the states in their fiscal consolidation efforts, notwithstanding near-complete absence of expenditure reforms.

In fact, during these years of high economic growth, revenues grew more than proportionally of rates of GDP expansion, but the fear is that in a downturn, the compression of revenue growth would also be at a rate higher than the decline in GDP growth. This is already demonstrated in the high revenue deficit of the centre and wiping out of revenue surpluses of many states.

So, expenditure reforms and creating an atmosphere conducive for huge investments in the economy are inevitable this time around when the policy-managers are facing a far greater task. Note that the fiscal consolidation programme that was afoot from 03-04 to ‘07-08 was not enough to alleviate the country’s debt burden.

In its recent interim budget, the outgoing government had spelt out a plan to reduce the Centre’s revenue deficit to zero and fiscal deficit to 3% by ‘11-12. This clearly looks unrealistic. The FRBM-II would need to be much more credible.

Whether the FRBM-II would meet its objective is contingent on how fast the economic grows over a five-year span and here, external developments are a major determinant. If growth this year is just 5.75% as IMF has forecast or even lower (4%) as prognosticated by World Bank, it would indeed be extremely difficult or impossible to achieve an average rate of 7.5% for five years and concurrently run a credible medium-term fiscal consolidation programme.

Even if growth decelerates to 6% this fiscal, it needs to be above 7% next year and around 8% in the subsequent three years to post a five-year average growth of 7.5%, which certain simulations of Crisil suggest, would bring the Centre’s fiscal deficit to 4.2%, revenue deficit to 2.5% and primary deficit to 0.7% by 2013-14.

Any growth rate less than that could afflict the fisc with serious structural flaws and put the country in a debt trap. It would take many more years for salvaging the country from such a disastrous situation.

Therefore, it is incumbent on the next government to act aggressively and decisively on facilitating an investment-led high growth. Having budgeted a fiscal deficit of 5.5% of GDP for this fiscal (there were tax cuts amounting to another 0.5% after the interim budget), the Centre would pan out huge borrowing programmes in the coming months. State governments would also follow suit.

In the second half of this year, private credit might also pick up. All these could put stress on liquidity in second half of the fiscal which the government and RBI would need to address through decisive policy measures. A massive spike in borrowing cost ought to be averted. The introduction of the goods and service tax would not only be revenue-boosting but also cut costs of businesses.

Public offering of PSU equities would makes revenue streams from sources other than taxes robust. The new government should also try and rationalise subsidies and cap it at say, 2% of GDP (last year, owing to the shock from the relentless surge in global commodity prices, subsidy bill had mounted to over 4% of GDP). The Also, FRBM-II must offer a broader definition of fiscal deficit by including expenditure items that are currently called "off- budget."


http://economictimes.indiatimes.com/...7.cms?flstry=1
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Old May 18th, 2009, 08:57 AM
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Re: Will budget 2009-10 will be affected over the wins by UPA in lok sabha election i

Dalal Street loves UPA..? Or is it the reduced impact of the coalition parties?

But anyway, trading halted due to the Sensex reaching the upper circuit breaker. Gained more than 2000 points in a few minutes.
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Old May 18th, 2009, 10:34 AM
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Re: Will budget 2009-10 will be affected over the wins by UPA in lok sabha election i

Is2009, while I welcome you to our community and appreciate your participation, tell me one thing - do you work for or are somehow affiliated with indyalive? The reason to ask this bluntly is that you have been repeating the same link in all your posts?

We too require a link to any news story and you will notice that most of them are from popular news sites from India. Yet I have not understood why you only link to one particular link repeatedly?

About your topic - Well, now that UPA is in power, they will continue the budget and other policies as before. In a way its good that Communists are nowhere in the picture. I believe, and the way the BSE reacted and had to be shut down for the day on Monday, that economic reforms will continue at a rapid pace. Congress has understood that good governance and economic policies will get them support from all strata of the electorate.

Even states where Congress did not win, the BJP won because of good governance and policies.

So I think our democracy is maturing - slowly but surely - and this a good sign. I do believe that our PM is a fine economist and has some veterans in the government who can guide our economic policies well. I must applaud all those responsible in the government who did not allow the trade of these 'sub prime' securities in our markets. It helped in preventing the total meltdown which we saw in the US market.
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