Farm sector gets top priority as budget looks for inclusive growth

28 February 2007

Populism took centre stage as finance minister P. Chidambaram gave primacy to agriculture and the social sector while presenting the Rs.680,521-crore ($148 billion) general budget for 2007-08.

"Agriculture must top the agenda for policy makers and hold the first charge on resources," the finance minister said in his 100-minute speech in the Lok Sabha.

"The declared objective is faster and more inclusive growth," Chidambaram said as he enhanced budgetary allocations for education, agriculture, water, child development, women welfare, urban renewal, employment guarantee schemes and social security net.

In a bid to bring down overall inflation and help curb the rise in the prices of some food items, he said excise duty on crude oil would be reduced to 6 per cent from 8 per cent and futures trading banned immediately in wheat and rice.

The finance minister said he was also giving a new thrust to agriculture, on which two-third of the 1.17 billion population still depends, the small taxpayer and small service provider. "Faster economic growth has given us, once again, the opportunity to unfurl the sails and catch the wind."

"We need faster growth because, at our level of incomes, there can be no doubt that we must expand the production base of the economy if we want to provide broad-based improvement in the material conditions of living of our population, .......... But growth alone is not enough if it does not produce a flow of benefits that is sufficiently wide-spread. We, therefore, need a growth process that is much more inclusive, .......... and which also ensures access to essential services such as health and education for all sections of the community," said prime minister Manmohan Singh.