Fiscal Outlook And Union Budget of 2008

Overall Rating: star ratingstar ratingstar ratingstar ratingstar rating[0/5]Total Votes [  ]  
Rate this page:
Fiscal outlook and union budget of 2008 is expected to encompass changes in many spheres of the economy. The article below provides an insight into the probable changes, which may take place in India due to the budget.

The economic performance of India has been quite good and the rate of growth during the period 2007-2008 was 9% as compared to 9.5% in the FY 2006-2007. Wholesale price are manageable because they are less than 5% but the main cause of concern is the cost of production of food grains despite the fact that production levels were very good during the FY 2007-2008.

Another interesting fact is that even though there was decrease in export activities and there was considerable appreciation in the value of rupee, current account deficit was not impacted. Appreciation of the rupee can also be attributed to the fact that there was an escalation in the inflow of capital.

The fiscal conditions appear to improve significantly but when liabilities pertaining to "off budget" is taken into consideration, the situation appears gloomy. The gross fiscal deficit in relation to gross domestic product or GDP has dropped to 6.4% during the period 2006-2007 from 9.9% during the period 2001-2002.

Revenue deficit showed improvement. There was a decrease in revenue deficit to 2% between 2006-2007 from 7% during the same period. Some of the instances when similar things occurred were in case of South Korea, which attained a densification of six percentage points during the period1963 to 1973. This it had achieved by forsaking the strategy related to chemical and heavy industry. Vietnam is also another nation, which made marked improvements during the period 1991 to 1995. Vietnam had attained this by compression of expenses by 6 percentage points.

Both the State as well as the Central government had been very instrumental in reducing the revenue deficit in India. Enhancing revenue productivity led to fiscal adjustments in India. Buoyancy in revenue supported expenditure on various programs as well as projects. The union budget of 2008-2009, expects that this buoyancy could be further maintained.

The role played by NSDL or National Security Depository Limited in developing the information system pertaining to income tax has also been remarkable.

>> More about India Budget