PTI adds: Budget aims to tame inflation: PM

Prime Minister Manmohan Singh today termed the budgetary proposals for 2007-08 as anti-inflationary, which was aimed at controlling prices through reduction in excise duty on many items.

"The budget certainly has an anti-inflationary effect," he told reporters, adding the government had moved forward with its fiscal consolidation and deficit reduction programmes.

"We are moving in that direction," he said adding the steps taken in the budget should provide the assurance that "inflation will not be allowed to get out of hand."

The Prime Minister said the government had targeted a 9% GDP growth during the 11th Plan.

The Prime Minister made it clear that the government will not hesitate to import essential items in case there was domestic supply constraints.

He said during the current year the government imported 55 lakh tonne of wheat besides importing vegetable oil.

Reaffirming the government's commitment on enhancing spending on social infrastructure, the Prime Minister said a lot of focus had been given on education and healthcare.

He said the budget sought to lay emphasis on improving access to social services and social safety net. "Education and healthcare are the primary imperatives as fas as this budget is concerned," Singh said.

He said there was a need to improve the skill level and special emphasis was being laid on secondary education.

The Prime Minister said emphasis is on "supply side responses" and the National Programme of Pulses, Ground Water Resources and the strengthening of Rain-Fed authority should give a new momentum in this direction.

"We can import commodities which are in short supply," he said.

The Prime Minister said the toning up of Rain-fed authority was aimed at utilisation of the water particularly for dry land agriculture.

Singh said the budget aimed at fiscal consolidation through reduction of excise and custom duties in a number of commodities. "This will certainly bring up the anti- inflationary bias of the budget," he said.

The Prime Minister said the expectation of the masses on the direct tax had been taken care of and the threshold exemption limit had been raised by Rs 10,000.

Industry disappointed

India Inc today expressed disappointment over Finance Minister P Chidambaram's Budget 2007 raising concerns on lack of measures to increase productivity and losing an opportunity to provide relief to the corporate sector.

"The budget is disappointing as there has been no steps announced to increase productivity in agriculture, electricity and other sectors which are not producing up to their potential," R Sesashayee, president, CII, said.

He pointed out that since revenue from customs and excise were increasing, this could have been a time to reduce excise duty to 20% if not 15% overall, which would have been in line with the Kelkar Committee Report.

Ficci president Habil Khorakiwala said a wrong signal has gone to the corporate world as the government has increased cess and dividend distribution tax.

"One does not understand how the multiple taxes should be charged. I think the feeling of the chamber is that the Finance Minister has lost an opportunity of providing relief to the corporate world," Khorakiwala said.