According to the Union Finance Minister Pranab Mukherjee, Indian economy recently has been able to consolidate properly. The government has also brought about several important reforms at the institutional level to ensure that in the near future India is able to achieve double digit economic growth.
The government will be looking to introduce economic measures that might not grab the headlines but play an important role in improving the lives of common people. Food inflation has been a critical issue of late, as has been current account deficit.
According to the finance ministry Indian economy has shown itself to be amazingly resilient and the primary focus is on creating a more effective and stronger economy. It is also focusing on an all-inclusive development. The ministry also accepts that corruption is a major issue and stricter measures need to be taken against it.
One of the major challenges before Indian economy will be to sustain present levels of private investment.
India Budget 2011-12 – Economic Policy Reforms:
Infrastructure debt funds to be created.
The limit till which a non Indian organization can invest in the 5 year corporate infrastructure bonds has been increased by 20 billion dollars.
Policy for foreign direct investment to be made more liberal.
A public debt bill will be brought out at the parliament soon, along with an independent office for debt management.
Tax free bonds worth INR 300 billion to be created in order to spur infrastructural development.
Bills for insurance, banking and pension funds to be introduced.
Food security bill to be launched in 2011-12 fiscal.
A Constitution Amendment Bill will be introduced for initiating the goods and services taxes.
Mutual funds registered with the Securities and Exchange Board of India (SEBI) will now be allowed to entertain subscriptions from overseas investors.
New Companies Bill to be brought out as well.
India Budget 2011-12 – Agricultural Reforms:
The budget will focus on doing away with congestion in the food sector supply line in 2011-12.
Capacity for food storage will be increased 15 new mega food parks will be established in 2011-12. 30 had been sanctioned in 2011-12 and 15 of these have been constructed already.
There are possibilities of a Green Revolution in the eastern part of India.
The public-private partnership model would be developed further.
The targeted credit infusion for the agricultural sector will be increased to INR 4.75 trillion.
Farmers have to be provided access to easy credit.
Farmers will receive 3 percent interest subsidy.
Steps will be taken to better nutritional security.
INR 3 billion has been earmarked for acquiring 60,000 hectares that will be used for palm oil plantations.
Production of fodder needs to be increased.
New fertilizer policy will be used for urea.
Indian Economy – Steps for the Future:
Government will be taking various steps so that operators in the kerosene, fertilizers and LPG industries receive direct cash transfers.
New coins bearing the new symbol of the INR, will be introduced.
B Srikrishna, an erstwhile Supreme Court judge, will head the Financial Sector Legislative Reforms Commission. It will work on restructuring the financial rules and regulations of India and is expected to finish these operations in 2 years.
The salary of Anganwadi employees has been increased to INR 3000 from INR 1500.
A five fold strategy will be implemented for dealing with the black money in Indian economy. 13 new agreements for double taxation avoidance will be signed and CTBT s foreign tax arm will be reinforced. The Enforcement Directorate will be made three times stronger than before.
A mortgage risk guarantee fund will be set up for people with low income levels.
A bill for reviewing the Indian Stamp Act will be brought out.
The housing loan limit, applicable for the priority sector, has been brought up to INR 25 lakhs.
For highlights of India Budget, click here – India Budget 2011-12: Highlights