All eyes are on the Budget 2008-09February 19th, 2008 - 2:54 pm ICT by admin
New Delhi, Feb 19 (ANI): Budget for 2008-09 is being formulated in the background of many concerns.
And these include the downward revision and deceleration in the manufacturing sector, slowdown in non-food credit sector from over 30 per cent last year to about 20 per cent this year.
Other than that the infrastructure sector has also recorded a lower growth rate of 6 per cent during April-November this year from 8.9 per cent a year ago.
Nevertheless, the economy in the current year is expected to grow at over 8.5 per cent.
The price situation is also likely to remain within the comfort zone, as stated by the Reserve Bank. Increasing prices of food items have also stabilized with a better domestic production during the current year.
However, formidable external and domestic policy challenges like the recessionary environment in the United States may pose problems in the budget.
Meanwhile, inflationary concerns have prevailed upon the Reserve Bank to maintain the status quo with regard to the interest rate as the Federal Reserve has reduced the rate by 75 basis points.
Managing external flows, pegging the exchange rate at the appropriate level and monetary management will also continue to pose serious policy challenges.
On the fiscal deficit front, the Union Government is well on course of achieving the Fiscal Responsibility and Budget Management (FRBM) target, though it seems doubtful whether the target of phasing out the revenue deficit will be achieved.
Electoral considerations are there naturally. So, at the moment it is all eyes on the Budget 2008-09. (ANI)
Tags: basis points, budget management, comfort zone, credit sector, deceleration, downward revision, external flows, federal reserve, fiscal deficit, fiscal responsibility, food credit, food items, infrastructure sector, manufacturing sector, monetary management, policy challenges, revenue deficit, slowdown, target, union government