The main focus of the annual budget that was presented by India's finance Minster P. Chidambaram would be targeted at achievement of a 10% growth rate. If this were to be accomplished, it would help in the alleviation of poverty, which is omnipresent accross the entire country. The industrial sector had enabled the country achieve an 8.1% economic growth. Attempts would be made to reduce the financial deficit from the current 4.1% to 3.8% next year.
The provision of incentives to encourage research and development activities, more specifically in the R&D intensive sectors such as drug and pharmaceutical, information technology through appropriate financial and other measures formed an important part of the prebudget discussions.
The provision of seed fund for R&D activities on an annual basis, the extension of weighted deduction benefit to a period of 10 years, the increase in weight from the current 150% to 200% to widen the scope in the drug and pharmaceutical industry, ban on price control imposition and dividend distribution tax on this competitive industry, reduction of the excise duty from 16% to 8% were amongst the other topics discussed.
The Government had promised increased spending on healthcare and education. Consistent with the promise, a corresponding 31% and 22% increase in spending on education and health was sanctioned by the Union Minister. The announcement of this enhancement for these service-oriented sectors is believed to result in the much-sought social development. The total amount of financial resources allocated to these sectors has been fixed at Rs.24, 115 crore (education) and Rs.12, 546 crore (health).
An increased funding for the National Rural Health Mission from the current Rs 6553 crore to Rs 8207 crore has been sanctioned. This would ensure the extension of health care facilities in over 100, 000 blocks in the rural India.
The finance minister has allocated more funding for the National Rural Health Mission with the budgetary provision being increased from Rs 6,553 crore to Rs 8,207 crore in next fiscal. This would extend the health care facilities to 100,000 blocks in rural areas.
Other highlights of the annual budget include enhanced spending on rural infrastructure ($4.2bn), increased spending on defence sector ($20bn) and increase in old age pension. It has also been planned to construct five mega-power projects for which contracts would signed by December.
From the time of Independence, we have indeed come a long way in increasing life expectancy, reducing of infant mortality rate by as much as 50%, the provision of essential immunization to nearly 42% of children in the rural and urban areas. Although this represents an accelerated growth of the health care industry, there are several areas such as public-private health care partnerships, control of infectious diseases and respiratory infections that need a facelift.
The service and industry sector has contributed to a 7% growth of the Indian economy over the past 4 years. Let us hope that this increased spending on the education and health sector would add momentum to socio economic growth and development of the country.