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India's finance minister announced the government's new budget yesterday, promising a slew of measures that attempt to balance welfare spending with high economic growth and infrastructure development, while vowing to keep a tight control on the fiscal deficit.
It was Finance Minister Arun Jaitley's first full budget since Prime Minister Narendra Modi won a majority in national elections in May on the back of promises to turn around the economy and boost job creation.
There were a few of the reforms that the government has been promising, but economists and business leaders reacted to yesterday's announcement with cautious optimism, a far cry from Jaitley's first interim budget in July, which was widely panned.

"It's a very positive budget. No big bang, but a steady move forward," Ajay Shriram, president of the Confederation of Indian Industries, told CNN-IBN. "It's moving in the right direction."
Jaitley said the Indian economy was slated to grow by 7.4 per cent in the current fiscal year, which ends in March, and continue to grow at between 8.1 and 8.5 per cent in the next year.
"The credibility of India's economy has been re-established," Jaitley told Parliament in a 90-minute speech. "India is about to take off on a faster growth trajectory once again."
New estimates announced in late January make India the world's fastest-growing economy, surpassing China.
But the higher projections follow a revision of the baseline against which India calculated economic growth.
India's annual growth averaged about 8 per cent in the decade up to 2010, but slumped to about 5 per cent in the following years.
Jaitley said his government would stick to the country's "challenging" fiscal-deficit target of 4.1 per cent of gross domestic product in the current year.
But he said the government's target of bringing that number down to 3 per cent would take three years because of the need to increase government spending to boost infrastructure growth in Asia's third-largest economy.

Jaitley announced an increase of 700 billion rupees (HK$88 billion) in investments on roads, railways and other infrastructure.
He said the government would complete 100,000km of roads that are currently under construction and build another 100,000km.
"It is quite obvious that incremental change is not going to get us anywhere," said the finance minister. "We have to think in terms of a quantum jump."
The government also announced a reduction in corporate tax from 30 per cent to 25 per cent over the next four years, starting next fiscal year.
"India's high corporate tax rates compared [with] other Asian countries" hurt its ability to attract foreign investment, and lowering the tax rate would bring "higher growth and more jobs", Jaitley said.
Despite having widely panned the previous government's welfare programmes, the finance minister announced no cuts to India's food, fuel or fertiliser subsidies.
In fact, Jaitley announced new funds for a costly rural job-creation programme that his Bharatiya Janata Party has often cited as one of the failures of the previous Congress party-led government. He also promised to introduce a universal social-security scheme.
Perhaps with an eye on upcoming local elections, including in the largely poor and rural state of Bihar, Jaitley said "all our schemes should centre around the poor".
Additional reporting by Agence France-Presse


India's budget pledges infrastructure spending to help economy ‘fly’

India's Finance Minister Arun Jaitley (centre) holds a briefcase containing budget documents on Saturday. Photo: EPA

The finance minister pledged massive increases in infrastructure spending, including its dated railway network. Photo: EPA

Jaitley said the government was committed to achieving “genuine, effective upliftment of the poor'. Photo: AP

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Asia

South Asia

High growth, infrastructure spending are highlights of New Delhi's economic blueprint, while creating jobs, controlling deficit


India's finance minister announced the government's new budget, promising a slew of measures that attempt to balance welfare spending with high economic growth and infrastructure development, while vowing to keep a tight control on the fiscal deficit.
