Speech of
Shri P. Chidambaram
Minister of Finance
22nd July, 1996
PART A
Sir,
I rise to present the regular budget for the
year 1996-97.
An unusually peaceful general election produced an
unusually complex mandate. It was the duty of every political
party to be faithful to that mandate. Accordingly, political
parties of different complexions and different ideologies have
come together to form this government. Many of them are regional
parties, albeit with a national outlook. What has united us is a
resolve to preserve India's secular heritage and to provide a
representative government committed to faster economic growth and
enhanced social justice.
The United Front is a coalition. Before assuming office,
the partners of the coalition finalised a document called "A
Common Approach to Major Policy Matters and a Minimum Programme",
popularly called the CMP. This historic document was released to
the nation by our Prime Minister, Shri Deve Gowda, on June 4,
1996. When I began work on the CMP I was not even a Minister.
When we completed our exercise I found myself in the office of
Finance Minister. Therefore, my commitment to the CMP goes beyond
the office I hold. Hon'ble Members will have many opportunities
this afternoon to test my commitment and they will find that the
CMP has provided the foundation and set the agenda for this
Budget.
An Update of the Economic Survey 1995-96 was laid on the
Table of the House last Friday. It is a slim document of no more
than 21 pages and I hope it made for good weekend reading. Our
conclusions are that the economic indicators point to high
growth but there are significant areas of weakness. The Update
has identified these areas as the fiscal deficit, sluggish
agricultural growth, inadequate infrastructure, high interest
rates and the trade deficit. The most worrisome is the decline in
the growth of agricultural crop production to 0.9 per cent in
1995-96. The Update has also listed fiscal challenge,
infrastructure challenge and employment and poverty alleviation
as key issues which need to be addressed on a priority basis.
The CMP has declared that the government will follow
economic policies that will promote growth with social justice
and lead to greater self-reliance. We have no use for jobless
growth; nor for growth that leaves untouched large sections of
the people. We will remove controls and regulations over
agriculture and industry. We will keep our economy open and
competitive in order to encourage more foreign trade and attract
more foreign investment. We will reform the tax system. We will
broaden and deepen reforms of the financial and capital markets
even while strengthening independent regulators like the Reserve
Bank of India (RBI) and the Securities and Exchange Board of
India (SEBI). Above all, we will observe fiscal and monetary
prudence which is the key to low inflation and rapid growth.
This Budget, therefore, has seven broad objectives:
To remain steadfast on the course of economic
reforms and liberalisation aimed at accelerating
economic growth.
To address the concerns of the poor and provide
them with basic minimum services in a time-bound
manner.
To ensure broad-based growth in agriculture,
industry and services to achieve high employment.
To ensure fiscal prudence and macro-economic
stability.
To enhance investment, especially in the
infrastructure sectors.
To strengthen key interventions to promote human
development.
To ensure viability in the balance of payments
through strong export performance and larger
foreign investment flows.
I shall now deal with the major areas of the economy and
spell out our policy initiatives in order to achieve the
objectives that I have just listed.
