NEW DELHI, Feb 28 (Agencies): India, Asia's third largest economy, is aiming for annual economic growth of more than 10 per cent in coming years, the finance minister told parliament Tuesday on presenting the federal budget.
The government expects to clock growth of 8.1 per cent for the current fiscal year ending March and Finance Minister P Chidambaram said the Congress party-led coalition wants to ramp up the economy further to reduce widespread poverty.
"I believe that growth is the best antidote to poverty," Chidambaram said.
The budget for the fiscal year starting April 1 is the third for the government since winning power in May 2004.
Allies, including communist parties that provide crucial support, have put pressure on the government to deliver on pledges to improve the lives of the almost 300 million Indians who live on less than a dollar a day.
Chidambaram said the government has done so despite a series of natural disasters including floods and the devastating earthquake that hit the Himalayan state of Kashmir, controlled by India and Pakistan, in October.
"This year was the best of times and worst of times; nature was not kind to us," Chidamabaram said contrasting the natural disasters and the high growth rate.
The business community has been upbeat ahead of the budget with the country's main stock market index, the Sensex, up to a record high of 10,282.09 Monday.
PTI adds: Cautioning that the economy's rosy outlook was not devoid of risks of inflation, hardening interest rate and fiscal deficit, the pre-budget Economic Survey Monday prescribed hastening tax and labour reforms and measures to remove infrastructure bottlenecks to sustain high growth.
The 2005-06 Survey tabled in Parliament said the Indian industry needed to be unburdened from high level of taxes and distortive exemptions that provided perverse incentives. It favoured levying user charges and cutting unwanted subsidies.
Simplification and digitisation of tax administration remains a pre-requisite for a transparent and hassle free tax system, the report card of the government, said.
The Survey projected economic growth of 8.1 per cent during 2005-06 with new industrial resurgence, pick up in investment and modest inflation.
Identifying power shortage as the single most impediment to growth, the Survey said appropriate policy initiatives constituted the first and foremost challenge for speedy infrastructure development.
It favoured liberalisation of Foreign Direct Investment (FDI) regime for captive mining as slowdown in mining sector was of concern, especially coal, which accounted for 60 per cent of the country's primary energy demand and 70 per cent of power generation.
The management of lingering oil prices required rapid and bold policy responses, the Survey said regretting that the movement towards market determined prices in the hydrocarbon sector has floundered pending resolution of subsidies in domestic LPG and PDS Kerosene.