Budget 2000-2001

Speech of

Shri Yashwant Sinha

Minister of Finance

 

Sir,

I rise to present the first budget of this millennium.

2. This budget for 2000-2001 has some other firsts to its credit also. It is the first budget of the new Government which took office in October 1999 under the visionary leadership of Shri Atal Bihari Vajpayee. It is also the first budget of the second half century of our Republic and the first budget of the new century. I hope it will add many more firsts to its credit as time goes by. I thank the Hon’ble Prime Minister for entrusting me with this historic responsibility which I stand here to discharge in all humility.

3. The year 1999-2000 has been a year of many challenges: the 50 day war in Kashmir, the super cyclone in Orissa, long months of political uncertainty before the general elections, a somewhat weak monsoon, a near tripling of world oil prices and the continued fragility in world economic recovery. Nevertheless, we have met these challenges resolutely, accomplished a great deal and the nation is stronger as a result.

4. The economy’s performance is described in detail in the Economic Survey I laid before the House yesterday. Let me just touch a few highlights. A broad-based industrial recovery is under way. Despite lower growth of agriculture due to inclement weather, overall economic growth this year is expected to be nearly 6%. The infrastructure sector is performing much better. For the first time in 17 years the inflation rate has stayed below 4% for 42 consecutive weeks. Even more remarkable, the Consumer Price Index (Industrial Workers) in November 1999 showed zero increase over the previous November. This is an enormous boon for the weakest sections of our society. Public food stocks are at record levels. Exports have achieved a remarkable turn around from negative growth last year to nearly 13% growth in dollar terms in April-December, 1999. Our software exports are also booming. Although surging international oil prices have increased our oil import bill by more than $6 billion, our foreign exchange reserves have nevertheless attained new record levels. With the return of investor confidence our stock markets have also soared to new heights.

5. In my last two budgets I have addressed the accumulated shortcomings in our policies and freed our companies to compete globally. We have strengthened our agricultural sector, energised our financial markets and laid the foundations of an exciting new economy. With this, my third budget, I propose to put India on a sustained, equitable and job-creating growth path of 7 to 8% per year in order to banish the scourge of poverty from our land within a decade. The next 10 years will be India’s decade of development. To achieve this objective our strategy must encompass the following elements:

¨ Strengthen the foundations of growth of our rural economy, especially agriculture and allied activities.

¨ Nurture the revolutionary potential of the new knowledge-based industries such as infotech, biotechnology and pharmaceuticals.

¨ Strengthen and modernise traditional industries such as textiles, leather, agro processing and the SSI sector.

¨ Mount a sustained assault on infrastructure bottlenecks in power, roads, ports, telecom, railways and airways.

¨ Accord the highest priority to human resource development through programmes and policies in education, health and other social services, with special emphasis on the poorest and weakest sections of society.

¨ Strengthen our role in the world economy through rapid growth of exports, higher foreign investment and prudent external debt management.

¨ Establish a credible framework of fiscal discipline, without which the other elements of our strategy can fail.

6. In all these areas we must pursue thorough-going economic reforms to unlock the creative energies of our people and thus reap the gains of productivity growth. But our reforms must also be guided by compassion and justice. In his Address to Parliament in October 1999 the President has set out the broad outlines of our programme of second generation reforms. This budget carries forward the process of implementation.