India's new Janata Party government has announced its first budget. It includes higher taxes and?
India's new Janata Party government has announced its first budget. It includes higher taxes and a better deal for people living in rural areas. There has also been a cut in defence expenditure.
SYNOPSIS: The new government inherited a sagging economy and inflation running at 15 per cent. India's Finance Minister, Hiralal Mujibhai Patel, was faced with this as well as unemployment and uneven distribution of wealth. Mr Patel put most emphasis on agriculture and people living in rural areas, which is not surprising because nearly 80 per cent of India's population lives and works in the country. Expenditure on agriculture under the new budget will be 30,240 million rupees (GBP2,000 million sterling), or just over 30 per cent of the total outlay.
Mr Patel said India's most fundamental problem had been an uneven rate of economic growth. Before the Prime Minister, Mr Morarji Desai, and his allied parties came to power the economy had been dominated since independence by the Congress Party.
The new taxes should raise an additional 1,300 million rupees (GBP85 million sterling) reducing the deficit to 720 million (GBP47 million sterling).
There are higher taxes on motor vehicles, electrical goods and cigarettes, a higher surcharge on income tax, a higher wealth tax, but a rise in the minimum taxable earnings. Defence spanding has been cut by about two per cent.