Budget will meet challenges of economic growth: Manmohan Singh

Prime Minister Manmohan Singh today said the budget was aimed at consolidation of fiscal deficit and moderation of taxes and will meet challenges of the economic growth of the country.

On the controversial black money issue and lack of any amnesty scheme in the budget to bring it back, Singh said there have been such schemes in past that have yielded little success.

"I don't think they have succeed in providing permanent cure for black money. We need to have a systems reform in a holistic manner to deal with this menace," he said.

Congratulating finance minister Pranab Mukherjee for doing a "commendable" job, Singh said, "You cannot please all the people. The finance minister has done as good a job as possible."

He was responding to a query on why there was no increase in the income tax exemption limit for women.

"This is the budget which meets all the challenges of our economy and polity face in the next fiscal year... This is a budget that matches the challenges that our economy faces - sustained growth, inclusive growth, equitable growth and thus, a determined effort to curb inflationary expectations," Singh said in an interview to Doordarshan.

Singh also noted that "quite a lot" has been to encourage foreign direct investment.

The prime minister said that there was a need to maintain a high growth rate for which adequate provisions have been made in the areas of infrastructure, social and agricultural sectors.

"It is certainly necessary to curb inflationary expectations for which it is very essential that there should be a path of fiscal consolidation and the finance minister has done a commendable job by planning to reduce fiscal deficit and revenue deficit," Singh said.

What Mukherjee has done by way of social sector spending, encouraging investment in agriculture, tax concessions, "I think this budget matches the challenges that our economy faces", he said.

Singh said that Mukherjee has "walked on both legs" by keeping the taxes moderate through a simplified system.

The prime minister said the finance minister by raising the exemption of tax limit to the lowest rung of the ladder benefited all tax payers.

Noting that the budget signals a "reforms-oriented" government as Mukherjee has promised to come out with legislations regarding insurance and pension fund, Singh said, "If these promises are converted into solid acts of Parliament, this will provide a boost to capital market as well as the corporate sentiments".

Singh said the Direct Taxes Code would become a reality by April 1 next year. As far as the other promises were concerned, much depends upon "what we can push through Parliament", he said.

"There is no lack of effort on part of the government. Although there are some difficulties with regard to GST as some states are not on board. I am confident we will persevere and we will succeed," Singh said.

He said that the moderation on taxes on balance was a good thing to play with and "if you are moving towards a GST, I think it is also necessary to have that end product in mind. The finance minister has thought it through."

The peak rates of both customs and exercise duties have been kept at ten per cent, he said, adding, "We cannot be too certain that everything would work their arithmetic the way we want to work. We must have ample scope to contribute to fiscal consolidation".

On social sector spending, he said these programmes required a boost in terms of delivery services and the problem has to be faced head-on.

Asked whether it was an "easy" budget, Singh said that considering the international climate and what was happening in the international financial system, maintaining a high growth was "something for which the finance minister and the government deserve congratulations".