Whose Budget Is This ?

Whose Budget Is This ?

Indian Holocaust My father`s Life and Time - EIGHTY

Palash Biswas



Inflation, infrastructure and inclusiveness. These were the three "I"s we were expecting the finance minister to focus on in Budget 2007, and that's what he's done. All in some measure. For Vote bank politics, of Course, His attempt to make the 9 per cent plus growth story more inclusive has been to announce substantial additional spending on social infrastructure, health and education, and agriculture. But the main target remains the same : Escalate the Global Market, Protect US, Brahminical and Zionist interests and destroy indiginious production sytem. We know well the staunch supporters of Indian Globalisation have been dictating for more reforms. But the dictates from elsewhere are much more relevent for the Government of India to sustain itself as the out and out capitalist, Brahminical and zionist forces wait in the wings to take over. Assemebl y Election results have sent the Red Light Alert.

The government is relying on rising tax revenue as the masses have to bear the burns and previleged classes are spared. Indutrial cover has got the permission of Tax Holiday. Food and Employment are not the priorities at all.

Enslaving the SC, ST, BC, ONBC, Minorities- the majority Indian population is the key they hold on. Thus, Finance Minister P Chidambaram announced an increased allocation of Rs 3,271 crore (Rs 32.71 billion) for the schemes benefiting Scheduled Castes and Scheduled Tribes in the General Budget presented on Wednesday for 2007-08.Presenting the Budget, the finance minister said in respect of schemes with at least 20 per cent of the benefits earmarked for SCs/STs, the allocation has been increased to Rs 17,691 crore (Rs 176.91 billion).The allocation under Rajiv Gandhi National Fellowship Programme for SC/ST students studying M Phil and PhD courses has been increased from Rs 35 crore (Rs 350 million) in 2006-07 to Rs 88 crore (Rs 880 million) in 2007-08, he said.Chidambaram also announced that the provision for post-matric scholarship programme for SC/ST students has also been increased from Rs 440 crore (Rs 4.4 billion) in 2006-07 to Rs 611 crore (Rs 6.11 billion) in 2007-08.He said a separate provision of Rs 91 crore (Rs 910 million) for similar scholarships to students belonging to socially and educationally backward classes has also been proposed.The finance minister said a sum of Rs 63 crore (Rs 630 million) to the share capital of the National Minorities Development and Finance Corporation has been proposed to expand the reach and intensity of its efforts.Last year, he said, a sum of Rs 16.47 crore (RsThe consumer durables segment can be segregated into consumer electronics (TVs, VCD players and audio systems etc.) and consumer appliances (also known as white goods) like refrigerators, washing machines, air conditioners (A/Cs), microwave ovens, vacuum cleaners and dishwashers.

War and Civil Wars have been the best tools of Global Imperialism which has deep roots in Weapon Industry. Thus, Continuing its drive to modernise the armed forces, the government on Wednesday hiked the defence budget for 2007-08 to Rs 96,000 crore (Rs 960 billion), an increase of 7.8 per cent over the current fiscal outlay.The increase was Rs 10,000 crore (Rs 100 billion) more in actual terms, as the defence ministry spent Rs 86,000 crore (Rs 860 billion) as against its outlay of Rs 89,000 crore (Rs 890 billion) for 2006-07.

Why Budget, It is Cricket

As the Indian Team heads to the West Indies for the World Cup, fans voice their wishes and wants.National media focused the event with much hype and Union Budget telecast remained off the line round the clock.India's World Cup team leaves for the West Indies on Wednesday night carrying with it the hopes and prayers of over a billion cricket-crazy fans, all anxious to see it emulate Kapil's Devils of 1983 by returning home with cricket's biggest prize.

Bring home the cup, boys!
Shah Rukh Khan, actor

We may have said rude and demeaning things about the team when they have lost, but we take it all back. We love you and hope you bring back the World Cup

Is it a delibrate attempt to divert the basic Issues?

Focus on TV was on reactions of political parties and tax payers on expected aline, Expert opinion of committed economists and Metro consumers. Out of focus are the common Masses based in Rural India who have been the scapegoats always.

Development and Infrastructure have been on focus always. What development?
My foot.
What Infrastructure?
Again my foot?

All roads targets Raw Matter for industries and prostitutes for the ruling classes. The so called infrastructure is never meant for the masses. It is for capitalist development.

So called social agenda and welfare progrrammes are well targeted to strengthen the Election machinery.

For whom the bell tolls?

Information technology is best used to enhance globalisation. But recent election results in Punjab and Uttaranchal and coming elections in the power base Uttar Pradesh had been counted well.So so many assurances. So many allocations and plans, good for nothing.


Buoyed by a strong economy, India's finance minister called on Wednesday for billions of dollars in investment in agriculture and education to spread the benefits of growth more evenly.
In an annual budget address, Finance Minister Palaniappan Chidambaram proposed billions of dollars in spending to buoy the ailing rural economy and to open access to quality education, a dearth of which has hindered India's thriving outsourcing industry.Answering calls for greater investment by Indian outsourcers and multinationals, like Microsoft, which have vast operations here, Chidambaram proposed to raise federal spending on education by 34 percent, to $7.3 billion, including a doubling of outlays on secondary education. He proposed to raise health care spending by 22 percent, to $3.4 billion, and to inject an extra $1.3 billion into Bharat Nirman, a New Deal- style effort to build rural infrastructure like roads and telephone lines.

Will this budget is going to help the starving underclasses in Tea Gardens in India? In Jute mills?
The evicted Rural India from Indigineous production system?

Would this budget inspire some enthusiasm in the hearts of all those helpless Farmers countrywide who have no choice but to commit suicide?

After all whose budget is this?

Tumbling Sensex exposes the well curtained underground play.

Mirroring the heavy sell-off in the global markets, the Sensex opened with a huge negative gap of 434 points at 13,045, and soon tumbled to a low of 12,801 - a drop of points from the previous close.

The index, thereafter, swung to the Finance Minister's speech between 13,000 and 13,300. Though selling was seen across-the-board, cement and technology stocks were hammered following negative vibes from Budget 2007.

Is it only coincidence that the head of government in all the three South asaian countries India, Pakistan and Bangladesh happen to be the World Bank Officials. All three of them Dr Manmohan singh, Shaukat Aziz and Dr Farouq Ahmed!

Now the Global government is ready to launch a goverment run by West based NGOs in Bangladesh to be headed non other than the Poverty Eradiction fame economist, Nobel Laureate Dr Mohammad Unis!

Is Manmohan Singh a Washington appointee?

A Prattler's Tale

(Memoirs of Ashok Mitra, chief economic adviser to government of India when Mrs. Indira Gandhi and former Finance Minister of West Bengal)

(Book Review by) MJ Akbar

Deep into Dr Ashok Mitra's new book, A Prattler's Tale: Bengal, Marxism and Governance (Samya, Rs 595), I began to feel a growing sense of irritation. Here was this virtually ceaseless, seamless sequence of the most wonderful political anecdotes I had read in years, and so many of them lost the last-mile edge because the author had refused to name names, although the descriptions took you near enough the identity.Dr Mitra's career is packed with "former" designations -- chairman of the Agricultural Prices Commission and chief economic adviser to government of India when Mrs Indira Gandhi was prime minister (she called him Ashok), finance minister to Jyoti Basu after the Left Front triumph in Bengal in 1977 -- and his memoirs are a treasure house of incident, perception, analysis, and sheer good fun, replete with the kind of story that is a highlight of the epicurean adda, or gossip, sessions that were and are a preferred privilege of the Kolkata Bengali elite.This book will be exploited by the intelligent historian and should be enjoyed by anyone remotely interested in public affairs. Dr Mitra has a justified reputation for fearless honesty. So why had he hidden so many names?And then, ouch! I came across a comment about me that was sharp to the point of being merciless. Relief followed: Ashokda, which is how I have called him for well over two decades, did not mention my name.I went down on a metaphorical knee to offer thanks to God, in whom Dr Mitra does not believe, and the author, in whom Dr Mitra does.Was the comment accurate? Yes. It was absolutely correct and I fully deserved the toxic barb. Dr Ashok Mitra is honest, but he is not ruthlessly honest. Phew.Mine was a case of trivia, but the absence of names in one story was of serious import. Dr Mitra has a startling revelation about the surprise appointment of Dr Manmohan Singh as PV Narasimha Rao's finance minister in 1991.....

Whole article is on this link.....

http://docs.google.com/View?docid=dgnwt3dd_2fmtwxd&revision=_published

But the big disappointment for the ruling classes seems to be is Chidambaram's absolute silence on reforms. This is the first budget since the reforms began in 1991 that a finance minister has been so completely silent on reforms in a Budget speech. All others have contained references to at least broad policy thrusts.This was Chidambaram's last chance to embark on any kind of reform, next year will most likely be the last one before the 2009 general elections. Realists will say that with the pressures of inflation, recent electoral defeats and the Quatrocchi affair, Chidambaram was following instructions to remain firmly on the right side of the Left.

Optimists will say that this is what budgets should be, just a statement of accounts, with all policy changes made outside the Budget.

Unfortunately, though we see very little reforms happening outside the Budget. Just going by history, there has been very little progress on reforms since the UPA came to power in 2004. As Shankar Acharya, Manmohan Singh's former chief Economic Advisor, points out in a recent paper, privatisation has been halted, reform-inclined legislation like the bill to reduce government ownership in public sector banks to 33 per cent for instance has been allowed to lapse.

The reformist Electricity Act of 2003, which was passed by the NDA has not seen much follow up action. The pricing of petroleum products has become more politically administered than ever before. His worry is that if the growth dividends of economic reforms occur with a lag, that is, if you admit that we are in part today reaping the benefits of reforms initiated in the 90s, then the paucity of reforms in the last three years may take their toll in the years ahead.

That is something to worry about. Really, the ruling classes would have loved to have seen a Great Reformer celebrating the 10th anniversary of his dream budget of 1997 with a little more reformist panache.

Surojit Gupta and V. Ramakrishnan report for Reuters and published in Washington Post:

NEW DELHI (Reuters) - India said on Wednesday it would use tax revenue generated by a booming economy to raise spending on health, education and its flagging farm sector to improve living conditions for hundreds of millions of the poor.International rating agency Moody's said the budget was "overly accommodative" leaving too much for the central bank to do in fighting inflation, although other analysts said the package would encourage investment and growth.
"It seems the government is feeling very rich as it is an expansionary budget," said Han-Sia Yeo, a strategist at Bank of America in Singapore.

"The priority seems to be inflation fighting to garner political support, support infrastructure spending and fiscal consolidation in that order."

Fresh from defeat in two state elections on Tuesday that reflected voter anger about rising prices, the ruling Congress party slashed duties on a host of items in its annual budget to control inflation, now just below its highest in two years.

With one eye on more state elections later this year and the other on national polls due in 2009, the government said total spending would rise 21 percent to 6.81 trillion rupees ($154 billion), including higher spending on education, health and a rural jobs guarantee scheme.

"Our human and development indices are low, not because of high growth but because growth is not high enough," Finance Minister Palaniappan Chidambaram told parliament.

"Faster economic growth has given us once again the opportunity to unfurl the sails and catch the wind."

The Indian economy, Asia's fourth largest, is expanding at its fastest pace in 18 years and is forecast to grow 9.2 percent in the fiscal year ending on March 31.

The government has made high growth the centerpiece of its agenda to lift a quarter of the billion-plus population out of extreme poverty, although its communist allies said the budget did not go far enough to help farmers and the poor.

The government is relying on rising tax revenue, which Chidambaram said would reach 4.04 trillion rupees in 2007/08, up 16.7 percent, and market borrowing, estimated at a net 1.09 trillion, up from 1.07 trillion in 2006/07.

The rupee fell slightly while the main stock market index ended down 4 percent, weighed down by global concerns. Cement stocks suffered after duty was raised on producers selling above a certain price.

INFLATION FIGHTING

Chidambaram said the economy was in a stronger position than ever to promote "inclusive" growth, equity and social justice.

"It therefore behoves us to set higher goals," he said.

But the consequence of expansion has been higher inflation as supplies fail to keep pace with demand and infrastructure such as ports and power has struggled to cope.

The central bank has tightened policy and Deputy Governor Rakesh Mohan said it would keep taking action as necessary, sending the yield on the 10-year government bond to 7.98 percent, up 9 basis points on the day.

Wholesale price inflation touched 6.73 percent in early February, fueled partly by food prices, and Chidambaram said such a huge country must be self-sufficient in basic food items, otherwise supply constraints could upset macroeconomic stability.

"Hence agriculture must top the agenda of the policymakers," he said.

The 2007/08 fiscal deficit target was 3.3 percent of gross domestic product, down from 3.7 percent this fiscal year, which

global rating agency Standard & Poor's said was encouraging.

Chidambaram kept corporate tax rates broadly unchanged, raised the personal income tax exemption threshold and added 1 percent on all taxes to fund education.

He said the tax-to-GDP ratio had increased to 11.4 percent this year from 10.5 percent due to better compliance, gave tax holidays to research and infrastructure projects and said a national goods and service tax would be introduced in 2010.

Welfare State Pose

"Education and health care are the prime imperatives as far as this budget is concerned," Prime Minister Manmohan Singh said after the speech.

By focusing on the nation's grinding poverty, the budget proposal suggested that the government, led by the Congress party, was already turning its eye toward the 2009 general election, said Kuldip Nayar, a veteran political commentator in Delhi. That emphasis appeared to come at the expense of some of the business-friendly measures that industry had hoped for.

What is a budget at all?

Budget is a plan expressed in quantitative, usually monetary term, covering a specific period of time, usually one year. In other words a budget is a systematic plan for the utilization of manpower and material resources.

In a business organization, a budget represents an estimate of future costs and revenues. Budgets may be divided into two basic classes: Capital Budgets and Operating Budgets.

Capital budgets are directed towards proposed expenditures for new projects and often require special financing. The operating budgets are directed towards achieving short-term operational goals of the organization, for instance, production or profit goals in a business firm. Operating budgets may be sub-divided into various departmental of functional budgets.

India's Budget - India's public finance system follows the British pattern. The Indian constitution establishes the supremacy of the bicameral Parliament--specifically the Lok Sabha (House of the People)--in financial matters. No central government taxes are levied and no government expenditure from public funds disbursed without an act of Parliament, which also scrutinizes and audits all government accounts to ensure that expenditures are legally authorized and properly spent. Proposals for taxation or expenditures, however, may be initiated only within the Council of Ministers--specifically by the minister of finance. The minister of finance is required to submit to Parliament, usually on the last day of February, a financial statement detailing the estimated receipts and expenditures of the central government for the forthcoming fiscal year and a financial review of the current fiscal year.

The Lok Sabha has one month to review and modify the government's budget proposals. If by April 1, the beginning of the fiscal year, the parliamentary discussion of the budget has not been completed, the budget as proposed by the minister of finance goes into effect, subject to retroactive modifications after the parliamentary review. On completion of its budget discussions, the Lok Sabha passes the annual appropriations act, authorizing the executive to spend money, and the finance act, authorizing the executive to impose and collect taxes. Supplemental requests for funds are presented during the course of the fiscal year to cover emergencies, such as war or other catastrophes. The bills are forwarded to the Rajya Sabha (Council of States--the upper house of Parliament) for comment. The Lok Sabha, however, is not bound by the comments, and the Rajya Sabha cannot delay passage of money bills. When signed by the president, the bills become law. The Lok Sabha cannot increase the request for funds submitted by the executive, nor can it authorize new expenditures. Taxes passed by Parliament may be retroactive.

Each state government in India maintains its own budget, prepared by the state's minister of finance in consultation with appropriate officials of the central government. Primary control over state finances rests with the state legislature in the same manner as at the central government level. State finances are supervised by the central government, however, through the comptroller and the auditor general; the latter reviews state government accounts annually and reports the findings to the appropriate state governor for submission to the state's legislature. The central and state budgets consist of a budget for current expenditures, known as the budget on revenue account, and a capital budget for economic and social development expenditures.

The national railroad (Indian Railways), the largest public-sector enterprise, and the Department of Posts and Telegraph have their own budgets, funds, and accounts (see Railroads; Telecommunications, this ch.). The appropriations and disbursements under their budgets are subject to the same form of parliamentary and audit control as other government revenues and expenditures. Dividends accrue to the central government, and deficits are subsidized by it, a pattern that holds true also, directly or indirectly, for other government enterprises.


India's GDP grows 8.6% in Q3


Indian economy continued to grow at a rapid pace of 8.6 per cent in the third quarter of the current financial year, led by the manufacturing and services sector while farm growth plunged to a low of 1.5 per cent.The 8.6 per cent expansion during October-December 2006-07 followed the growth of 8.9 per cent and 9.2 per cent in the first and second quarters of this fiscal, taking the average growth so far this year to just below nine per cent.

Manufacturing rose 10.7 per cent in the third quarter compared to 8.2 per cent a year ago, while farm sector growth declined to a mere 1.5 per cent as against 8.7 per cent in the third quarter of 2005-06, according to latest government estimates released on Wednesday.

In services, construction growth slowed down to 9.8 per cent from 16.6 per cent, financial services rose by 11.6 per cent compared to 9.8 per cent a year ago. Trade, hotels, transport and communication sector witnessed a growth of 13 per cent from 10 per cent a year ago.

Growth in the mining sector stood at 5.7 per cent as against 2.7 per cent, while electricity, gas and water supply sectors registered a growth of 9.3 per cent compared to 5 per cent in the year-ago quarter.

Taxpayers upset

Presenting his fourth consecutive budget, Finance Minister P Chidambaram greatly disappointed personal income tax payers.Chidambaram's Budget for 2007-08 on Wednesday proposed a marginal Rs 10,000 increase in threshold tax exemption limit, while foisting an additional one per cent education cess on them.

In the backdrop of rising prices and high inflation, tax payers were expecting increase in exemption limit by Rs 30,000 to Rs 50,000. But the threshold limit now stands at Rs 110,000 against Rs 100,000 earlier. The increase in exemption limit, which will provide a relief of Rs 1,000 to Rs 2,000, will be partly neutralised by increase in education cess from 2 per cent to 3 per cent.

This has to be paid not only on income tax but also on all products and services covered under excise, customs and service tax.

The finance minister has also put additional burden on tax payers investing in stock markets by raising dividend distribution tax from 12.5 per cent to 15 per cent. The Budget proposes to increase the income tax exemption limit from Rs 100,000 to Rs 110,000. For women, the exemption limit has been raised from Rs 135,000 to Rs 145,000, and for senior citizens from Rs 185,000 to Rs 195,000.

Inflation
Could he have done more on inflation? Well apart from cuts in peak duties and reduction in some excise duties, there is not much a finance minister can do to directly target inflation in the Budget. P Chidambaram has done what he could by reducing peak customs duties to 10 per cent, he did have space to bring it down further to the promised ASEAN levels of of between 7 and 8 per cent but not many of us were expecting that. Importantly he's maintained fiscal discipline, bringing down fiscal deficit to 3.3 per cent of GDP.

Applaud an over performance here, the budgetary estimate was 3.8 per cent. Remember better control over the fisc helps dampen the demand pressure on inflation.

Three cheers for that. Chidambaram has tried to take some of the spending out of the hands of the bureaucrats and into agencies like the LIC. Hopefully this will ensure better targetting of these programmes. The accent on Education is welcome and nobody will grudge the 1 per cent cess on corporate and income tax for this. A talent shortage has after all been a huge worry for corporate India.

Infrastructure: a bit of a disappointment, unless I am missing something in the fine print two hours after his speech. He's promised to consider the Deepak Parekh Committee report, which has a lot of good suggestions in it and has also spoken about using our forex reserves to fund infrastructure development.

Now this was a measure first proposed by the Planning Commission a couple of years ago. Then the finance ministry, which was then also headed by Chidambaram, had pooh poohed the suggestion. It will be interesting to see what form this will now take.


India hikes defence budget

Presenting the Budget in Parliament, Finance Minister P Chidambaram said the allocation of Rs 96,000 crore would include a whopping Rs 41,922 crore (Rs 419.22 billion) for capital expenditure or acquisition of new hardware, signalling that the armed forces would go ahead with some big-ticket weapons deals.He also promised to provide more funds to the defence ministry if the need arose."Needless to say, any additional requirement for the security of the nation will be provided," he said.

Defence Minister A K Antony said the continued hike in defence expenditure signalled the UPA government's "resolve to go full steam ahead with the modernisation" of the military."I am satisfied with the commitment of providing extra funds made by the finance minister," he said.

Antony, however, said there had been some laxity in certain fields during the modernisation drive, and efforts would now focus on ensuring the upgradation of the arsenal of all three services.

Though Prime Minister Manmohan Singh had said that efforts would be made to meet the demands of defence planners for taking defence spending to around three per cent of the GDP to push the modernisation process, the proposed outlay was only 2.1 per cent of the GDP.

For the past few years, defence spending has been hovering around 2.5 per cent of GDP, much below China's whopping 7.2 per cent and Pakistan's about four to 4.5 per cent of GDP.

It was only in 2004-05 that India made an unprecedented hike of 28 per cent in the capital outlay to become the world largest arms purchaser, pushing China to the second spot.

In a break with tradition, the government made a bold move to hike the outlay on capital expenditure to almost 45 per cent of the total defence Budget.

This is part of a new effort launched by the defence ministry to balance defence budgeting equally between recurring expenditure on items like salaries and the outlay for hardware and arms purchases -- a growing concept in the Western military powers.

The idea to strike a 50-50 per cent ratio between expenditure and outlay was the brainchild of External Affairs Minister Pranab Mukherjee, who held the defence portfolio till last year.

"This indicates we are moving in the right direction," Mukherjee told PTI on Wednesday.


Budget to trigger demand for consumer durables

Budget Measures
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Hike in allocation towards rural development and increased spread of employment guarantee scheme

Dividend distribution tax to be hiked from 12.5% to 15%

Additional education cess of 1% to fund secondary and higher education

Budget Impact
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Increase in spending towards upliftment of rural populace to lead to increased demand for durables in the long term


Higher education cess and dividend distribution tax to impact net profits and retained earnings

Sector Outlook
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As we see it, India's per capita penetration of white goods continues to remain dismal. Availability of easy financing options, increased competition resulting in falling prices and reduction in customs duty has been boosting retail sales. We expect these factors to continue to assist white goods demand going forward. However, as a matter of conservatism, keeping in mind the paltry margins and the highly commoditised nature of the sector, we would classify this sector as a high-risk one for retail investors.


Company Impact
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Hike in allocation towards rural development and increased spread of employment guarantee should increase demand for consumer durables, thus leading to higher growth for companies like Videocon.
Industry Wish List
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Cut in excise duty from 16% to 8%

Removal of inverted duty structure, particularly so due to the free trade agreement (FTA) with Thailand


Recognition of convergence in usage of technology products from a taxation perspective


Budget over the years
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Budget 2005-06 Budget 2006-07

Excise duty on clocks, watches of retail sales prices upto Rs 500 per piece is being raised from 8% and 16%. Parts of clocks, watches of retail price upto Rs 500 per piece will now be liable to tariff with an effective tax rate of 16%.

Excise duty on monochrome television has been raised from 8% to 16%. CTV will attract a uniform excise duty of 16%.

Excise duty on imitation jewellery has been raised from 8% to 16%.

Increased spending on infrastructure and maintaining economic growth momentum from a long-term perspective.
Excise duty has been imposed @ 2% on articles of jewellery on which a brand name or trade name is indelibly affixed or embossed on the articles of jewellery itself. Unbranded articles of jewellery and other articles of precious metals will continue to be exempt from duty. Imitation jewellery to attract lower excise duty of 8% as compared to 16% earlier.

Excise duty on air conditioners is being reduced from 24% to 16%. Consequently, abatement from retail sale price is also being reduced from 35% to 30%.

Peak customs duty reduced from 20% to 15%.

The new income tax brackets, the change in exemption and deductions available to individuals and the increase in exemption for women.


Key Positives


Yet to catch up: Penetration of durables continues to remain sluggish when compared to other developing economies.


The India story: Rising income levels, consumption patterns and urbanisation are some of the key factors that would result in higher growth in volumes in the long run.


Better affordability: Easy availability of finance has stimulated consumers to buy durables.


Rural unexploited: With the government focusing on rural electrification programme, the consumer electronic manufacturers stand to benefit over a period of time. But this has been slow to come by.

Key Negatives


Mismatch in duties: Higher import duty on key raw materials (ex: colour picture tubes) has been a cause of concern.


Fiercely competitive: Exchange schemes and pricing-play by some manufacturers have had a negative impact on top players. Prices of durables and electronics have been on the decline over the last three years


Growth is slow: Volatile performance of the agricultural sector has had a negative impact on demand. The sector's performance is highly dependent on monsoon and reforms, which has failed often.


Imports Vs Indian: Threats of cheaper imports from China and other South East Asian countries, both for electronics and watches.


Budget Speech


February 28, 2007

Mr. Speaker, Sir

It is my privilege to present the Budget for 2007-08.

I. A MID-TERM REPORT CARD ON THE ECONOMY

2. In November 2006, the UPA Government crossed the midpoint of its term of office. A midterm report card can now be presented. There are many pluses and a few minuses, and I shall deal with both candidly. The biggest plus is that the growth rate of GDP has improved from 7.5 per cent in 2004-05 to 9 per cent (Quick Estimate) in 2005-06 and, according to Advance Estimate, to 9.2 per cent in 2006-07. The average growth rate in the three years of the UPA Government is, therefore, 8.6 per cent. Thanks to this impressive performance, despite the poor start in 2002-03, the growth target set for the Tenth Plan of 8 per cent will be nearly achieved.

3. Manufacturing is the main driver of growth, and this augurs well for the future. In the three years of the UPA Government, the growth rate in manufacturing has accelerated from 8.7 per cent to 9.1 per cent and further to 11.3 per cent. The services sector continues to maintain impressive growth and has recorded, in the three years, a growth rate of 9.6 per cent, 9.8 per cent and 11.2 per cent respectively.

4. On the other hand, the agriculture sector has witnessed sharp ups and downs. Average growth during the Tenth Plan period is estimated at 2.3 per cent, which is below the desired level of 4 per cent a year.