Press Information Bureau

Government of India

Ministry of Finance

18-January-2012 19:35 IST

States Seek Growth-Centric Budget in Pre-Budget Consultations with union Finance Minister

The Union Finance Minister, Shri Pranab Mukherjee has emphasized that in a federal country like ours, States and Centre complement each other in managing the fiscal policy and the economy. He said that coordination between Centre and States is extremely vital for creating a conducive environment for growth and inclusive development in the country. He was addressing the Finance Ministers of States/UTs in a pre-Budget Meeting held here today. He stated that with a significant scaling-up of the development efforts in social sectors in the past few years, higher transfer of resources to the States and the growing integration of the domestic market, there is an urgent need for harmonising the economic policies at different levels. These pre-budget consultations serve that end, he said. The Finance Minister further stated that as the country enters the 12th Plan period in 2012-13, there is a need to balance the need for higher Government expenditure for supporting improved and inclusive growth and the imperative of fiscal prudence. The Finance Minister Shri Mukherjee said that at present, we are facing three major challenges viz. maintenance of inflation especially the food inflation at reasonable level, bringing the economy back on the path of fiscal consolidation and maintaining sustainable and inclusive growth. He sought the support of State Governments in this regard as he maintained that we can meet these challenges jointly with the mutual cooperation and support of each other. He also touched upon the issue of state of Indian and global economy and other related issues.

A number of suggestions were given by the participating Ministers in the pre-Budget Consultation process for the Union Budget 2012-13. It was stated that there was a need to focus on growth in rural areas and provide more resources and facilities in education and health sector. Some members stated that recommendation of the B.K. Chaturvedi Committee Report pertaining to reducing the number of centrally sponsored schemes should be implemented. Similarly, the recommendations of Dr Rangarajan Committee Report regarding efficient management of public expenditure should also be looked into. It was suggested that the classification of expenditure into plan and non-plan needs to be re-looked into. It was also suggested that various banking services especially regarding sanction/non-sanction of loans to individuals should be placed under Citizens’ Charter so that the time limit is fixed for delivery of specific services. The participants said that the Government should consider fiscal incentives to spur investment. Many State Finance Ministers were of the view that the Union Budget for 2012-13 should be growth-centric and employment centric as the country could not afford to have jobless growth. It was stated that emphasis should be laid on neo-natal care and supplementary nutrition for pregnant and lactating mothers. The focus should be on issues pertaining to boost agriculture production, urban infrastructure facilities and power development among others. Some Finance Ministers highlighted the need for higher investment in providing affordable housing, drinking water facilities, irrigation, flood management, welfare of minority communities and those living in hills and the north east.

Beside the Union Finance Minister Shri Mukherjee, the Minister of State for Finance, Shri Namo Narain Meena, Adviser to FM, Secretary (Economic Affairs), Secretary (Expenditure), Secretary (Financial Services), Chief Economic Advisor and Chairman, CBDT were present among others. The meeting was attended by the Chief Minister of Meghalaya; Deputy Chief Ministers of Bihar and Jharkhand and Finance Ministers and other Ministers of Andhra Pradesh, Arunachal Pradesh, Chhattisgarh, Gujarat, Haryana, Jammu and Kashmir, Karnataka, Kerala, Madhya Pradesh, Rajasthan, Sikkim, Tamil Nadu, West Bengal and NCT of Delhi.

DSM/SS/GN

Growth-centric budget balancing higher public expenditure with fiscal prudence to promote employment and inclusive growth. Pre-budget consultations urged a growth-centric, employment-focused budget that balances higher social and development expenditure with fiscal prudence, addressing inflation control, fiscal consolidation and inclusive growth through Centre-State policy harmonisation. States proposed rationalising centrally sponsored schemes, improving public expenditure management, revisiting plan/non plan classification, adopting Citizens' Charter standards for banking services, deploying fiscal incentives to spur investment, and prioritising sectors such as health, education, agriculture, urban infrastructure, power, housing, water, irrigation and targeted welfare.