Indian Budget 2003-2004

III. THE BACKDROP

7. I want to now briefly share with Hon’ble Members the backdrop in which we address our responsibilities.

8. The circumstances in which we meet are defined by the current global uncertainties; their vortex lies over the Gulf, and Iraq is at the very core of it, even as the Israel-Palestine conflict smoulders. Vast naval armadas crowd the waters of the North Arabian Sea, and land and air forces prepare for battle. Nearer, our neighbour Afghanistan, torn by decades’ old violence, continues to struggle with post-Taliban tremors. In North-East Asia, old animosities are flared to near criticality through irresponsible external assistance. And, our immediate western neighbour, riven internally by multiple fault lines, spews venomous terrorism from the cauldron of its compulsive hostility for India.

9. Despite all this, and despite the present volatility in international oil prices, alongside a continuing sluggishness in global recovery, uncertain markets, a 9-month long military stand-off on our borders; the simultaneous challenge of combating externally aided and abetted terrorism; and the worst drought that we have faced in three decades; objectively, the country’s macroeconomic circumstances have never been better for attaining our developmental objectives of enhanced and sustainable growth, poverty eradication, employment generation, and improving the quality of life.

10. Sir, the overall economic performance in 2002-03 has been reported in detail in the Economic Survey. I do not wish to repeat all that except to highlight that despite the agricultural GDP decline of an estimated 3.1 per cent, caused entirely by a large decline in crop output, the country, registered a real growth of 4.4 per cent in GDP, net of inflation. Growth rates of industry (6.1 per cent) and services (7.1 per cent) accelerated very encouragingly, as did exports by a healthy 20.4 per cent.

11. From 1956 onward, continuously, we have endured serious foreign exchange constraints. Not any longer. After a gap of 24 years, our current account turned into a surplus in 2001-02, and continued to be in surplus during the first two quarters of the current year. Our reserves’ build up during the last year has been the highest ever in a single year, with reserves crossing $75.5 billion in the third week of February. In early-February, the Government decided to prepay $3 billion of its external loans. India is now an exporter of grain to 15 countries, and donor of hard currency aid to a dozen, alongwith rupee aid to another dozen countries. The rupee, with foreign assets to currency ratio of 124.8 per cent, is stable. Gross domestic savings, as a proportion of GDP at market prices, have also improved and stand at around 24 per cent. In the course of the last four years, our interest rates on Government securities, have rapidly gone down from 12 to around 7 per cent, thus setting the stage for growth of investment.

12. The National Development Council, in December 2002, approved the Tenth Five Year Plan, with a bold and ambitious target of 8 per cent annual growth on the average. One of the crucial aims of the Tenth Plan is to promote a balanced and equitable regional development and to advance the necessary policy and administrative reforms at the State level. The allocation for 2003-04 includes several additional initiatives such as promoting infrastructure by leveraging public money through private sector partnership, provision of 2 lakh hand-pumps in water-scarcity areas and schools, rejuvenation of 1 lakh traditional water sources in villages, research and development (R&D) support in pharmaceuticals, wind and solar energy, among others.

13. Permit me, Sir, to now address the ‘Panch Priorities’.

14. For eliminating poverty, it is only reforms that result in sustained growth and high employment that are the durable solution. However, given our comfortable food stock, there is both scope and a need for a direct attack, too.

15. Mr. Speaker, Sir, I am sure you agree that the disadvantaged must always be the first charge on our exchequer. This is our belief, it is our creed; this is also at the heart of ‘integral humanism’. Therefore, it has been decided, and I want this to be the first announcement that is made, that the Antyodaya Anna Yojana will be expanded from April 1, 2003, to cover an additional 50 lakh families raising the total coverage to more than a quarter of all BPL families during the year 2003-04. The additional budgetary expenditure on this account will be Rs.507 crore.

16. Sir, may I, in humility, say that this does cover the first part of my assurance: "Garib ke pet me dana,….".

17. Rural development, rural industries and artisans, and poverty alleviation in urban areas are addressed severally through various schemes in different ministries. A need has, therefore, been felt for sometime that all these schemes, of the same genre, be rationalised. To do that, a Committee headed by the Deputy Chairman, Planning Commission, is proposed. It will examine all schemes having a bearing on poverty alleviation and rural development, and recommend their practical convergence.