Union Budget 2010: A Move towards Economic Development

Economic development has been one of the key focus areas of the Union Budget 2010, presented by Finance Minister, Pranab Mukherjee. A critical challenge addressed by the FM is reverting to a GDP of 9% within the year, and paving way to cross over the ‘double digit growth barrier.’ Curbing inflation is another important area of concern mentioned in the budget, with food inflation crossing the double digit in the latter half of 2009-1010. 

Important Revisions in Union Budget 2010

The shadow of recession continues to linger on the Indian economy. This has redirected the focus of the government towards encouraging Foreign Direct Investment (FDI). The budget has incorporated several steps to simplify the FDI regime, including full liberalization of brand name, trademark and royalty payments. Additionally, the budget has widened the scope of banking and financial sectors by authorizing the RBI to give further banking licenses to private banking players.

Other critical growth-oriented revisions in the Union Budget are:

• Extension of export grants to small and medium enterprises, covering handicrafts, handlooms and carpets.
• Higher budget allocation to strengthen the Regional Rural Banks (RRB).
• Infrastructural development across the nation, with a budget allocation of Rs.1,73,552 crore.
• Increased funding towards school education, within a budget allotment of Rs.31,036 crore.

Union Budget 2010 and Development of Agricultural Sector

The agricultural sector contributes the lion’s share to India’s GDP. Consequently, the sector has been a chief area of fund allocation in Union Budget 2010. The budget has extended Rs. 400 crore to support the green revolution in the eastern regions of the nation, including Bihar, Chattisgarh, Eastern UP, Jharkhand, Orissa and West Bengal.

Increasing credit support to farmers is a key aim of the budget. Efforts in this regard include extension of loan repayment period and provision of additional interest subvention.