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FM's mantra to make India the world's 3rd largest economy
While presenting the Interim Budget 2014-15, the Union Finance Minister P Chidambaram said that in the next three decades India will become the third largest economy after the United States and China.
In future, the fortunes of China and India will have a significant impact on the rest of the world. Therefore, the Indian government must be responsible not only to itself but to the whole world by keeping the country’s economy in robust health.
The Finance Minister said that the UPA government has a clear vision of the goals that have been set for itself.
Chidambaram elaborated the ten tasks the government intends to take to achieve those goals.
(PIB)
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Interim Union Budget 2014-15: Complete Coverage
FM's mantra to make India the world's 3rd largest economy
Fiscal Consolidation
A target of fiscal deficit of 3 percent of GDP must be achieved by 2016-17 and must always be kept below that level.
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Interim Union Budget 2014-15: Complete Coverage
FM's mantra to make India the world's 3rd largest economy
Current Account Deficit (CAD)
Since the economy will run a Current Account Deficit every year for some more years, it can be financed only by foreign investment, whether it is FDI or FII or ECB or any other kind of foreign inflow. Therefore, foreign investment must be encouraged.
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Interim Union Budget 2014-15: Complete Coverage
FM's mantra to make India the world's 3rd largest economy
Price stability and growth
In a developing economy where the aim is high growth, a moderate level of inflation will have to be accepted. RBI must strike a balance between price stability and growth while formulating monetary policy.
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Interim Union Budget 2014-15: Complete Coverage
FM's mantra to make India the world's 3rd largest economy
Financial Sector Reforms
The recommendations of the Financial Sector Legislative Reforms Commission must be implemented immediately as they do not require any change in legislation. Also, a timetable must be drawn for other recommendations that require legislation.
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Interim Union Budget 2014-15: Complete Coverage
FM's mantra to make India the world's 3rd largest economy
Infrastructure
The country must rebuild its infrastructure and add a huge quantity of new infrastructure. Every proven model must be adopted but the PPP model must be more widely used.
New financing structures must be created for long term funds and pooling of investments.
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Interim Union Budget 2014-15: Complete Coverage
FM's mantra to make India the world's 3rd largest economy
Manufacturing
The government must focus on manufacturing and especially on manufacturing for export.
The minister proposed that all taxes, Central and State, that go into an exported product should be waived or rebated.
He also proposed that there should be a minimum tariff protection so that there is an incentive to manufacture goods in India rather than import them into India.
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Interim Union Budget 2014-15: Complete Coverage
FM's mantra to make India the world's 3rd largest economy
Subsidies
Given the limited resources, and the many claims on the resources, the government must choose the subsidies that are absolutely necessary and give them only to the absolutely deserving.
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Interim Union Budget 2014-15: Complete Coverage
FM's mantra to make India the world's 3rd largest economy
Urbanisation
The country’s cities will become ungovernable, and perhaps unliveable, if attention is not paid to the decay in these cities.
Cities have wealth and also create wealth. But that wealth should be tapped for resources to rebuild the cities with a new model of governance.
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Interim Union Budget 2014-15: Complete Coverage
FM's mantra to make India the world's 3rd largest economy
Skill Development
Skill development must rank alongside secondary education, university education, total sanitation and universal health care in the priorities of the government.
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Interim Union Budget 2014-15: Complete Coverage
FM's mantra to make India the world's 3rd largest economy
Sharing responsibility between States and Centre
States have the fiscal space to bear a reasonable proportion of the financial costs of implementing flagship programmes and must willingly do so, so that the Central government can allocate more resources for subjects such as defence, railways national highways and telecommunications that are its exclusive responsibility.