The Economic Survey on Friday pegged the fiscal deficit for 2010-11 at 4.8 per cent, lower than the Budgetary estimates of 5.5 per cent, on the back of higher realisation from 3G spectrum auction and buoyancy in revenues. India’s fiscal deficit had ballooned to 6.3 per cent of the GDP in 2009-10 in view of stimulus spending worth billions of dollars to combat global financial meltdown, and was pegged at 5.5 per cent for the current fiscal.
In the Budget 2010-11, Finance Minister Pranab Mukherjee had estimated fiscal deficit to be Rs 3,81,408 crore (Rs 3814.08 billion).
“With growth reverting to pre-crisis levels in the current fiscal, revenues remaining buoyant and a much higher than budgeted realisation in in non-tax revenues arising from 3G/BWA auctions, there was headroom for higher levels of expenditure a the given fiscal deficit targets,” the Economic Survey 2010-11 tabled in the Parliament said.
It said the government has followed the path of fiscal consolidation during April-December FY’11, as it partially withdrew the sops given to the industry in 2008 and 2009.
The government had in 2010 mobilised Rs 1.08 lakh crore from auctioning of spectrum for 3G and broadband wireless access (BWA) services.
“The Budget for 2010-11 had begun the process of fiscal consolidation with a partial withdrawal of the stimulus measures as at that juncture there was clear evidence of economic recovery,” the Survey said.
Stimulus package provided by the government at the time financial meltdown stimulus package helped India to grow by 6.8 per cent in 2008-09, and by 8 per cent in 2009-10. “The policy stance was to continue to aid the growth momentum in the short run to facilitate its attaining pre-crisis levels and simultaneously to address long run sustainability concern,” said the Survey.
BWA, Pranab Mukherjee, India, GDP, Parliament
Rail Budget 2011-12- Who praised Mamata, who slammed her Railway Minister Mamata Banerjee presented the Railway Budget for 2011-12 on Friday.
While her supporters hailed the budget, her detractors are up in arms, dumping the budget as the West Bengal poll manifesto.
Though a host of pro-public announcements made by her in the last Railway Budget (2010-11) has been implemented, Indian Railways’ finances have gone from bad to worse.
A sensitive budget: Congress
Prime Minister Manmohan Singh said on Friday no increase in freight rates and passenger fares in the Railway Budget would reduce inflation.
“It is a common man’s budget without increase in freight and passenger fares, thereby it will help to weaken cost push element of inflation,” Singh told reporters soon after Railway Minister Mamata Banerjee presented the budget in the Lok Sabha.
At the same time, Banerjee has taken care to increase investment in critical areas of infrastructure which would supplement growth momentum of the economy, he said. “The Railway Minister has done a commendable job”, Singh added.
The Congress hailed the Railway Budget saying it shows ‘concern and sensitivity’ towards the common man and expressed happiness over no hike in fare.
“The most significant aspect of the budget is that she (Mamata Banerjee) has not increased any fair.
“She has shown her great concern and sensitivity towards the needs for the common man to which the United Progressive Alliance government is totally committed,” party spokesperson Manish Tewari told reporters.
He also congratulated the Railway Minister for her ‘frank’ admission of the challenges before the ministry due to implementation of 12th Pay Commission recommendations and the assertion that Railways have come out of its difficulties and is on development path.
Asked how the no hike in fares could be justified when it leads to over-all losses, Tewari said, “Railways are the main medium of transportation for the common man it is not proper to expect only profit earnings by it”.
A West Bengal poll manifesto: BJP
Bharatiya Janata Party on Friday dubbed the Railway Budget presented by Railway Minister Mamata Banerjee as an ‘election manifesto’ for West Bengal Assembly polls which has ‘ignored’ the rest of the country.
“Mamata Banerjee’s rail budget is like an election manifesto. The entire focus is on West Bengal, and the rest of India has been totally neglected,” BJP general secretary Ananth Kumar told reporters in New Delhi.
Kumar said the railway budget should be scientifically formulated and should give credence to the regional balance and development of infratructure all over the country.
Nothing spectacular: CPI
Communist Party of India national secretary D Raja said despite certain populist announcements, the Budget does not have anything spectacular.
“It seems to be more ambitious than reality. Nobody is happy with the Budget. She has not announced any provisions for ongoing projects,” Raja said.
Communist Party of India-Marxist leader Nilotpal Basu claimed that the budget showed that the finances of Railways were in a very bad shape.
“It is very clear that the Railway finances are in a very bad shape. There is a drop in freight movement,” Basu said. Congress leader Rajiv Shukla said the budget was for the common man who has been given many facilities without any additional burden.
“A lot many schemes have been announced. One myth has been demolished that Railways are incurring losses. It is not true. There is no decline in revenue,” he said.
Nothing for safety, hygiene: India Inc
Railways Minister Mamata Banerjee’s rail budget on Friday received mixed response from India Inc, which hailed announcements on PPP projects but expressed disappointment at not enough being done for safety and hygiene.
Federation of Indian Chambers of Commerce and Industry said it is encouraged by the announcements of expansion of public-private-partnership projects in manufacturing and fruitification of public sector undertakings.
“These will give a fillip to and saving resources of the railways for more strategic uses,” it said.
Ficci said that for the first time the focus of the Budget has been towards the development of Jammu and Kashmir and North-East region.
“This will go a long way towards regeneration of these areas that have been among the most excluded regions of the nation hitherto,” the chamber said.
However, Assocham said ‘authorities should do more in future to improve safety and hygiene for the passengers’.
It said that in the rail budget, there is no clarity on how resources will be mobilised for network expansion and building new coach and locomotive factories.
Assocham said that more attention has been paid towards welfare aspects covering larger sections of the society rather than improving efficiency levels.
“The Railway Budget in nutshell has much less to offer to the business sector as its focus is more on welfare of the public and employees,” Assocham president Dilip Modi said.
According to Amar Ambani, head of research, IIFL – India Private Clients, “The railway budget sounds ambitious to state the least but given the track record, especially of lastyear, implementation seems unlikely again.
“For instance, the minister targets 700km of rail line addition in FY12 compared to 180km average.
“This figure is irrelevant because even last year the aim was for 1,000km, which missed the target by a wide margin.
An exercise in deceit: Yechury
Terming the Rail Budget as an ‘exercise in deceit’, the Communist Party of India-Marxist on Friday alleged that Banerjee had ‘cunningly juggled’ figures to show improved financial position of the PSU behemoth which it claimed had been turned bankrupt.
CPI-M leader Sitaram Yechury said the Railway Minister has played with figures to project an operating ratio of 91.1 per cent for 2011-12 which he claimed has touched 115 per cent at present.
“Railways have paid Rs 1,700 crore (Rs 17 billion) less as dividend,” and has, therefore, been able to show an improved operating ratio, he said.
“She has played tricks with figures and has cunningly juggled with statistics,” he said.
Criticising the minister’s move of clubbing all announced and pending projects under the Pradhan Mantri Rail Vikas Yojana, he demanded to know from the Planning Commission about the status of the announced projects.
He said Railway should have grown at around 12 per cent to maintain the country’s growth rate of 8 to 9 per cent, “but sadly the growth rate of the PSU was a mere three per cent at present”.
He also pointed to the large number of vacant posts in the organisation and accused the Minister of taking an ‘anti-labour’ position by blaming the implementation of the pay commission recommendations for the Railways’ financial mess.
“Despite Railways’ strength and sound economic fundamentals, they (the government) have done the unthinkable of turning Railways bankrupt,” Yechury said.
Stating that Railways’ share of goods traffic has come down to 35 per cent, Yechury said the minister could have laid focus on the Dedicated Freight Corridor Project, “but not a single kilometre of track has been laid so far”.