Government of India
“Democracy is the art and science of mobilizing the
entire physical, economic and spiritual resources of various
sections of the people in the service of the common good of
July 6, 2009
Key Features of Budget 2009-2010
to lead economy to high GDP growth rate of 9 per cent per annum at the earliest
to deepen and broaden the agenda for inclusive development
to improve delivery mechanisms of the government.
OVERVIEW OF THE ECONOMY
! Growth rate of Gross Domestic Product dipped from an average of over 9 per cent
in the previous three fiscal years to 6.7 per cent during 2008-09.
! Whole sale price index rose to nearly 13 per cent in August, 2008 and had an
equally sharp fall to zero per cent in March, 2009.
The structure of India’s economy changed over the last ten years with contribution
of the services sector to GDP at well over 50 per cent and share of merchandise
trade doubling to 38.9 per cent of GDP in 2008-09.
! Recognising economic recovery and growth as co-operative effort of the Central
and State Governments, meeting with Finance Ministers of States held as part of
preparation of the Budget. This is intended to become an annual feature.
TOWARDS ECONOMIC REVIVAL
To counter the negative fallout of the global slowdown on the Indian economy,
Government responded by providing three focused fiscal stimulus packages in the
form of tax relief and increased expenditure on public projects along with RBI
taking a number of monetary easing and liquidity enhancing measures.
Fiscal accommodation led to an increase in fiscal deficit from 2.7 per cent in
2007-08 to 6.2 per cent of GDP in 2008-09.
The fiscal stimulus at 3.5 per cent of GDP at current market prices for 2008-09
amounts to Rs.1,86,000 crore.
! Measures taken by the Government were effective in arresting the fall in GDP
growth rate in 2008-09. 6.7 per cent growth rate recorded in 2008-09.