Budget will be popular, says Montek

The first Budget to be unveiled by the new United Progressive Alliance government on July 6 will be 'popular', Planning Commission Deputy Chairman Montek Singh Alhuwalia said.

"The word populist has negative overtones, but I am sure (the) finance minister will present a popular Budget. However, we should maintain the mystery of the Budget and you have to wait and see what comes out," he told PTI in an interview.

Making a case for 'strong government effort' to promote growth, Ahluwalia said, "The prime minister has said we should get back to between 8 and 9 per cent (economic growth rate), that might take a couple of years. I think it is feasible but it requires some strong and purposeful action."

Prime Minister Manmohan Singh earlier in the month had asked the finance ministry "to ensure that the next union Budget adequately and appropriately reflects the priorities and programmes outlined in the President's address to the joint sitting of Parliament."

Among other things, President Pratibha Patil had talked about a Food Security Act to provide 25 kg of rice or wheat per month at Rs 3 per kg to people below poverty line.

Finance Minister Pranab Mukherjee, who will be presenting the Budget for 2009-10 in the Lok Sabha in first week of July, has already indicated the government "would continue to focus on public spending in employment oriented growth sectors, increasing the purchasing power of the people."

Besides, Mukherjee had said that the focus of the government would also be on "development of rural  sector-- both agriculture and non-agriculture-- and development of labour intensive MSME sector".

Referring to the growth prospects during the current fiscal, Ahluwalia said, "Everybody now agrees that the worst is behind us and we must focus on reviving the momentum of growth. Last year, our growth rate was about 6.7 per cent. We are hoping we can do about 7 per cent this year."

Owing mainly to the impact of global financial crisis on the country, economic growth rate fell to 6.7 per cent during 2008-09, after posting 9 per cent in three consecutive years.

Noting that fiscal deficit can take a back seat during 2009-10, he said, "What we want to do at present is advance investment as much as possible so we can do more this year and may be next year, and then as economy recovers, we can do less. The idea is to anticipate the investment that otherwise would have taken place a bit later."

"This means the fiscal deficit would be higher in the short term, but would be lower in the future because we will be only redistributing the expenditure. If we could actually increase expenditure it would be wonderful but we do have overall limits," he added.