Promising to reinstate India's high economic growth, Finance Minister Pranab Mukherjee Monday presented a $204-billion annual budget with more funds for welfare schemes and infrastructure, along with a declared "vision" to reach the fruits of progress to each of the country's 1.17 billion people.
Acknowledging the rising expectations of a restless, young population that played a significant role in voting Prime Minister Manmohan Singh's government back to power, Mukherjee also promised new incentives for farmers and a big hike in funding for projects focusing on rural reconstruction, employment, urban renewal, education, health and other areas of social uplift.
He also sought to put more money in the hands of the average citizen by hiking the income tax exemption limit, while assuring a law soon that will address food security in the country by providing 25 kg of rice or wheat per month to the poor at a subsidised price of Rs.3 per kg.
Dressed in a spotless white bandgala suit, the 73-year-old politician said the new United Progressive Alliance (UPA) government will continue to push its agenda of "inclusive growth and equitable development" while meeting the "rising expectations of a young India".
In his typical no-nonsense style, Mukherjee - who had presented his last budget for the Indira Gandhi government 25 years ago - also resisted the temptation of peppering his 100-minute speech, broadcast live, with quotable quotes like many of his predecessors, restricting himself to two couplets from Kautilya, the famous political strategist of Alexander's era, and Mahatma Gandhi.
"The government recognises the challenges this task entails," said the finance minister, referring to the roadmap ahead of the new government in countering the slowing down of India's growth to 6.7 percent in the past year from over 9 percent in the preceding three.
"The first challenge is to bring back the GDP (gross domestic product) growth rate to 9 percent per annum," he said, setting the tone of his fourth career budget watched by Manmohan Singh and UPA chairperson Sonia Gandhi.
The other challenges, he said, included better governance and ensuring that the fruits of development reached across regions to touch the lives of every citizen - the "aam admi", the current catchphrase denoting the common man.
"The finance minister has done an admirable job," the prime minister said, soon after the budget was presented in the Lok Sabha. "The main aim of the budget is to minimise the impact of global recession," Manmohan Singh added.
"Overall, the strategy of the budget is to ensure that our economy recaptures the rhythm of the accelerated growth process. Simultaneously, it seeks to honour in large measure, the commitments we have made to our people."
India Inc, by and large, welcomed Mukherjee's proposals, given the difficult circumstances. But it had hoped for some more tax sops, while expecting a clear signal in the area of selling government stake in state-run enterprises.
The country's stock markets, however, thought otherwise and gave a thumbs down to the budget. The sensitive index (Sensex) of the Bombay Stock Exchange (BSE), a barometer of investor sentiment, fell by nearly 870 points, or 5.8 percent.
In his various proposals, Mukherjee kept the corporate tax rate unchanged, even as the budget sought to reduce the burden on industry by abolishing commodities transaction tax and the fringe benefit tax, but hiked the minimum alternate tax to 15 percent of book profits from 10 percent.
He also promised a pan-India goods and services tax from April next year and gave 100 percent tax deduction to political donations while assuring both short-term and medium-term steps to counter the negative fallout of global slowdown.
The minister enhanced the customs duty on items like set-top boxes, LCD televisions and premium textile goods to encourage domestic production and value addition. He also reduced the excise duties on large vehicles and trucks.
For individuals, the budget sought to raise the income tax exemption limits for senior citizens by Rs.15,000 and for women and other tax payers by Rs.10,000, while scrapping the 10 percent surcharge on personal taxes.
The proposals on direct taxes, he said, would be revenue neutral, while indirect taxes would yield Rs.2,000 crore for the full fiscal.
Yet, Mukherjee hoped to step up non-plan expenditure by 37 percent to Rs.695,689 crore (Rs.6,956 billion/$140 billion) over 2008-09 and plan expenditure by 34 percent to Rs.3,25,149 crore (Rs.3,251.49 billion/$65 billion).
The total increase in expenditure, thus, is 36 percent, he said, as he kept the total borrowing plan for the government at a high level, that will push up the country's fiscal deficit to 6.8 percent of GDP from 6 percent for 2008-09.
Mukherjee said the government would have to overcome all obstacles and create a brave new India.
"As we begin this five-journey, the road ahead will not be easy. We will have to manage uncertainties and there will be as many problems as there would be solutions."