Presenting the interim budget for 2014-15 amidst unruly scenes in Parliament today, finance minister P Chidambaram projected a GDP growth of 4.9 per cent during the fiscal.
Chidambaram has projected Plan expenditure for 2014-15 unchanged at the previous year's level of Rs5,55,000 crore and non-Plan spending at about Rs12,70,000 crore for the fiscal.
Against this, the budget sets a gross market borrowing target of Rs5,97,000 crore in 2014-15 fiscal, which more than covers the plan expenditure for the fiscal.
This mean that the borrowing target exceeds the Plan expenditure by Rs42,000 crore.
He said the current account deficit (CAD) will be contained at $45 billion and the fiscal deficit at 4.6 per cent of GDP.
On the other hand, Chidambaram said the country's forex kitty will see an addition of $15 billion during the fiscal.
''Our objectives were fiscal consolidation, reviving growth cycle, and enhancing manufacturing,'' said Chidambaram.
''I can confidently assert that the fiscal deficit is declining, the current account deficit is constrained, inflation is moderated; exchange rate is stable,'' he added.
Finance minister P Chidambaram started his budget speech on Monday amid rowdy scenes in Parliament over the bill for bifurcation of Andhra Pradesh.
The interim budget is being presented at a time when the Indian economy, Asia's third-largest, is facing its worst slowdown in nearly a decade, with shrinking manufacturing, slower jobs growth and high inflation.
Industrial production in the country has fallen to 0.1 per cent in the first nine months of 2013-14 fiscal year ended 31 December 2013, amidst a decline in manufacturing output.
Auto sales that had seen high growth over the past few years, have declined by about 5 per cent in 2013.
The interim budget for the fiscal 2014-15 will cover expenditure until the government's term ends in May. The full budget for 2014-15 will be presented by the new government in June-July.
Highlights of the Interim Budget
- Plan expenditure for 2014-15 seen at same level as in the previous year
- Non-plan spending estimated at about Rs12,70,000 crore in 2014-15
- Fiscal consolidation main aim
- FY'14 GDP growth seen at 4.9 per cent
- GDP growth in Q3, Q4 FY14 seen at 5.2 per cent
- Fiscal deficit for FY 2013-14 to be contained at 4.6 per cent of GDP
- Current account deficit to be contained at $45 billion
- Forex kitty to swell by $15 billion
- Agriculture GDP growth estimated at 4.6 per cent
- Food grain production stands at 263 million tonnes
- Agricultural credit in FY14 seen at Rs7.35 lakh crore against Rs7 lakh crore target
- Even after the slowdown the savings rate was 31 per cent in 2012-13
- Investment rate to be higher at 34.8% against savings rate of 30.1 per cent
- No steep decline in investment except in mining and manufacturing
- PSU capex seen at Rs2,60,000 crore in FY 14
- Slowdown in manufacturing sector a worry
- Food inflation worrying but falling
- Govt, RBI working in tandem to contain inflation
- Exports have recovered sharply
- Exports pegged at $326 bn; up 6.4 per cent
- Agricultural exports expected to touch $45 billion in 2013-14, up from $41 billion in 2012-13
- Food production estimated at 263 million tonnes
- Rupee still under pressure
- Govt taking several measures to encourage capital inflows
- Economy in better shape than two years ago
- Aims to create 1 million jobs
- Gross market borrowing seen at Rs5,97,000 crore in 2014-15
- Net market borrowing at Rs4,07,000 crore
- Debt repayment in 2014-15 seen at Rs1,89,700 crore
- Ways and means advances for 2014-15 estimated at Rs10,000 crore
Key Achievements of UPA I and UPA II
- Cabinet panel cleared 296 projects by end of January
- Eased rules governing infra projects' funding
- 7 new airports under construction
- Food Security Act ensures food to 67 per cent of population
- 29350 MW power capacity added
- 3343 km on new rail tracks added
- 19 oil blocks given out for exploration
- Several steps being taken to promote medium and small manufacturing units
Chidambaram said the risks to capital flows have accentuated due to global volatile conditions, which in turn brought the rupee under pressure.
He said India' growth should be seen in the light of the slowdown in global economic growth to around 3 per cent.
India one of the few countries that kept head above water during turbulent economic times, he said, adding that the objective is to revive growth cycle and enhancing manufacturing.
However, he said, nothing would be done that would affect the foundation of the country's economy.
He said the country is not facing any threat of ratings downgrade from agencies.