Budget a fair effort to achieve 9 percent growth: Moody's
New Delhi, July 6 : The union budget may not be a 'please all' budget, but it is a fair effort by the government to achieve 9 percent growth while coping with the challenge of 6.8 percent fiscal deficit, says the research arm of Moody's.
"India's 2009-2010 fiscal budget may not please all, but is a fair effort by the government to address two important existing concerns," says Sharman Chan, economist with Moody's Economy.com.
"Policymakers took expansionary steps in a wide range of areas including trade finance, farm subsidies, rural health, food security for poor households and environment protection," Chan said.
"However, given the heavy debt burden and yet another large fiscal deficit - projected at 6.8 percent of GDP - the Indian government could not afford overly aggressive moves. The latest fiscal boost are all relatively moderate."
According to her, despite the challenges, policymakers have taken some much-needed steps like funding support by the India Infrastructure Finance Co for infrastructure development.
"This is a welcome step, as infrastructure bottlenecks have long choked India's potential growth. Further to the long-term benefits of stronger economic fundamentals, infrastructure construction can also boost the economy right now by fuelling production and creating jobs," Chan added.
"Spending on the National Rural Employment Guarantee Scheme will increase 144 percent this fiscal year, which should benefit the predominantly low-income households in the rural regions."
Additionally, income tax reforms, which include giving higher thresholds for seniors and women, will also extend crucial support to some of the community's most vulnerable groups.
On the flip side, Moody's Economy.com said, the debt relief programme for farmers is not an efficient use of limited funds, and suggested that the government focus more on exploring the underlying problems and address what is causing debt accumulation.
On leaving corporate tax rates unchanged, Chan added: "Sitting tight appears to be the optimal choice for now, as a hike in taxes could derail economic recovery while a cut could put more downward pressure on the fiscal balance."
However, she said, the plan to introduce a goods and services tax (GST) may need further consideration.
"Although a wider tax base could help to generate revenue and therefore contain future fiscal deficits, the GST is a regressive tax that hurts low-income households the most and may come at the expense of social stability," Chan said.
--IANS
Clarke not ready for captaincy yet: former Australian players
Muraleedharan meets Congress leaders in Delhi to push for re-entry
Rehman Malik offers to quit if Blackwater presence in Pakistan proved
China makes its presence felt in Goa
Brett Lee should quit Test cricket: Rodney Hogg
Mercury expected to dip further in capital
Fill up all teachers posts by February, court tells Delhi government
Lebanese mother confesses to wiping out family
Five highway robbers arrested in Delhi
I am useless as a professor, says the Dalai Lama
I've lost 'Bigg Boss', but I feel like a winner: Kambli
Two Pakistanis arrested in Italy for Mumbai attacks
Is god a brothel keeper, wonders ex-law minister and triggers row
India, China interests intersect over a wide arc: Vice President
Fort Hood gunman couldn't wait to join Qaeda imam in paradise in the afterlife
AirAsia set to become most connected non-local airline in India
Clarke's ultimate dream is Australian captaincy
Winning more important to Murray than money
Nadal says Agassi's 'lying' revelations are 'terrible for tennis'
Liverpool will be in top four of the league table, vows Benitez
Maharashtra CM assures journalists of action against attackers on IBN office
Panesar blames measly 7,500 pounds for England career decline
Sarah Palin's book selling like hot cakes
CIA chief meets Narayanan
AIIMS advocates special test to make blood transfusion safer
Indian naval officer circumnavigating world reaches New Zealand
Chidambaram meets Tripura chief minister, discusses refugee repatriation
Chinese film 'Wheat' to open Goa IFFI
Bangalore's farm fair promotes organic farming
Prominent Pakistanis let off corruption charges to be named
Domestic help arrested for house robbery
Researchers construct erectile tissue in rabbits
Indian-American develops tool for efficient use of water
Haryana gets SEZ proposals worth Rs.50,000 crore
12-year-old tells Punjab, Haryana why girls are important
Dalai Lama hopes PM will raise Tibet issue in US
Fog delays unlikely this winter as airlines train more pilots
Fujiwara claims Pune ITF title
Rihanna Fights Off Latest Dating Rumours
Miley Cyrus Wins Dismissal In Controversial Race Photo