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2nd LD Writethru: India unveils budget aimed at energizing country's growth

Xinhua, February 28, 2015 Adjust font size:

India Saturday unveiled its budget, pledging to energize the economy by cutting down corporate tax and announcing a universal social security system for all its citizens.

Indian Finance Minister Arun Jaitley presented before the parliament the first full-fledged budget of Prime Minister Narendra Modi-led government, saying that "India is about to take off and it is time for a quantum leap on reforms.

"The corporate tax will be reduced from 30 percent to 25 percent," the finance minister said, as part of measures by the government to project an investor-friendly image.

Stating that India's economy has been growing at a strong rate, he said, "Inflation is down and foreign exchange reserves are high. These are all good signs of an economy that's restored its credibility. We have been able to conquer inflation, our objective is to keep inflation below 6 percent."

He added, "The real GDP growth is expected to be 7.4 percent making India the fastest growing economy in the world. India's economy is expected to grow between 8 per cent and 8.5 percent in the fiscal year that starts April 1, 2015. Aiming for a double- digit growth seems feasible very soon."

Spelling out welfare measures of the government to be undertaken in the next financial year, Jaitley said he proposed setting up of a "universal social security system for all Indians".

Among the major announcements include construction of five ultra mega power projects of 4,000 megawatts in a bid to ease the energy crisis, implementation of a uniform countrywide goods and services tax by April 2016, and spending on infrastructure to be raised by 11.3 billion U.S. dollars.

He also announced abolition of wealth tax but more or less keeping personal income tax exemption limit as that of last financial year and proposed the budgetary allocation in the defense sector.

India's Economic Survey, which was laid down on Thursday, indicated that India can increase public investments to drive growth without borrowing more. "India has reached a sweet spot and there is a scope for Big Bang reforms now," it said. Endi