India's 14th Prime Minister Dr. Manmohan Singh is rightly acclaimed as a technocrat and a thinker. He is well regarded for his diligence and his academic approach to work, as well as his accessibility and his unassuming demeanour. In 1971, Dr. Singh joined the Government of India as Economic Advisor in the Commerce Ministry. This was soon followed by his appointment as Chief Economic Advisor in the Ministry of Finance in 1972. Among the many Governmental positions that Dr. Singh has occupied are Secretary in the Ministry of Finance; Deputy Chairman of the Planning Commission; Governor of the Reserve Bank of India (RBI); Advisor of the Prime Minister; and Chairman of the University Grants Commission. In what was to become the turning point in the economic history of independent India, Dr. Singh spent five years between 1991 and 1996 as India’s Finance Minister. His role in ushering in a comprehensive policy of economic reforms is now recognized worldwide. In his political career, Dr. Singh has been a Member of India’s Upper House of Parliament (the Rajya Sabha) since 1991, where he was Leader of the Opposition between 1998 and 2004.
The Prime Minister spoke to India's national television network, Doordarshan soon after the announcement of the Union Budget for the fiscal year 2009-10 by Finance Minister Pranab Mukherjee. While pressing the budget, he said that the Government has taken several measures to counter the negative fallout of the global slowdown on the Indian economy. Mukherjee pointed out that these measures were effective in arresting the fall in growth rate of GDP in 2008-09 and India achieved a growth of 6.7%. He said that the efforts would be continued to provide further stimulus to the economy. The Finance Minister pointed out that the first challenge is to lead the economy back to the high GDP growth rate of 9% per annum at the earliest. Mukherjee said the second challenge is to deepen and broaden the agenda for inclusive development. The third challenge, he said, is to re-energize government and improve delivery mechanisms.
Following is the text of the Prime Minister, Dr. Manmohan Singh’s interview on the Union Budget to Doordarshan. "We will be reconciling with the requirements, short term requirements of the economy with the medium term goals of our economic and social policy," he said.
This is the first budget of this new administration presumably the first of the five budgets. To what extent does this fulfill the election promises and what will it do for the 'aam aadmi'?
The focus of the budget is to ensure that the short term requirements of the economy are reconciled with the medium term goals of our social and economic policies. Right now, the major concern is to minimise the impact of the international recession on the Indian economy. And for that it is necessary to provide stimulus to our economy - that process began in December last year. This budget carries that process further. At the same time, there are medium term concerns that the growth momentum of the economy must be restored notwithstanding the decline in the international demand for our exports. The road to do that is to strengthen infrastructure investment both in the public sector and in the private sector through the PPP route. The budget does that admirably well. And then simultaneously it also seeks to carry forward the process of inclusive growth, its expenditure programmes take care of our major flagship programmes, Bharat Nirman, National Rural Employment Guarantee Act programmes, the Urban Renewal Mission, the Rural Health Mission. All these programmes receive handsome additional allocations. So, I believe the Finance Minister has done an admirable job, as I said we will be reconciling with the requirements, short term requirements of the economy with the medium term goals of our economic and social policy, of the commitments that we have made to our people in our election manifesto.
What will this do for people in rural areas particularly?
It is essentially a rural development oriented budget. A record increase in allocation for National Rural Employment Guarantee Fund, increased money for irrigation benefit schemes, the Bharat Nirman programme which seeks to upgrade and modernise rural infrastructure. These are all programmes which will primarily benefit our rural areas and reduce the gap between Bharat and India.
At the same time, there is new urban emphasis. The Urban Mission has a huge increase of 86% in the outlay.
The Urban Mission focuses on the infrastructure needs of our cities. We have identified 60 cities, probably we need to relook at the number in due course of time. Simultaneously the emphasis on basic amenities for the poorer section, the slum free India commitment also is taken into account.
Food security Act. Any outlay for the project?
Well it is too early because the whole Act has to be put in place. As the Finance Minister mentioned we will soon come out with a draft that will be put on the website. We will invite large scale discussions with interested groups, civil societies and other groups and it is only then we can translate the inclusion of this legislation into an Act of Parliament.
State subsidy to foodgrains.
If we go by the number of people, who the Planning Commission records as people below the poverty line, I think the outlay on the Centre even if we provide grains at Rs.3, additional outlay is within the limits of practical politics. But if we go by the much larger figure of people below the poverty line which are floating around, I think then there will be some problem. We will sort out these problems. The commitment has to be honoured. And we will honour it in a credible way.
More public ownership, any targets for PSU disinvestment?
I haven’t done any detailed calculation. The Finance Minister has committed our Government to increased disinvestment while maintaining the public sector character of public enterprises. Much depends upon the evolving economic situation, the state of the stock markets. So I think no figure has been mentioned by the Finance Minister in the Budget speech.
Economic Survey suggests 25,000 crore per year.
Well, Economic Survey is a forward looking document.
Stock market reactions somewhat down, fiscal deficit high, any deadline to get back to FRBM targets?
This is a matter which the Government has also referred to the Finance Commission for advise. The Finance Commission will be reporting in the month of October. Unless we take into account the recommendations of the Finance Commission, anything by way of new deadlines, of what we achieve, will be counterproductive. So once the Finance Commission’s report is available, once the devolution pattern that they recommend is known for the next five years, it is only then that you can make credible guesses and work out credible strategies, how to handle the problem of fiscal deficit. I recognise this is an important problem in the medium term we have to return to the path of fiscal rectitude and the Finance Minister has committed our Government to that.
Would 2011 be a reasonable date?
I would like to look at the report of the Finance Commission.
Is Goods and Services Tax possible by April 2010?
It is important that the Government should reaffirm its commitment. If in the process of implementation there are some difficulties, they could be taken care of. But if right from the beginning, we work with the assumption that a lazy effort is called for, I think that could be counter productive.
The Administrative Reforms Commission has produced 15 voluminous reports. I am contemplating to set up an empowered group of Ministers to apply themselves as to how we can implement this voluminous document that has been produced by ARC.
What about the Security aspect?
We don’t have adequate number of policemen. Police forces in our country are under staffed. Security forces need our understanding and support. We will do all that is necessary to modernise the security and intelligence services. And that is a commitment which is essential to deal with problems of development. Law and order is a prerequisite task for development. So the security forces requirements, modernisation of our police force, modernisation of our intelligence agencies is a must.