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Budget 2011-2012
Speech of
Pranab Mukherjee
Minister of Finance
February 28, 2011
Madam Speaker,
I rise to present the Union Budget for 2011-12.
We are reaching the end of a remarkable fiscal year. In a globalised world with its
share of uncertainties and rapid changes, this year brought us some opportunities and
many challenges as we moved ahead with steady steps on the chosen path of fiscal
consolidation and high economic growth.
2. Our growth in 2010-11 has been swift and broad-based. The economy is back to
its pre-crisis growth trajectory. While agriculture has shown a rebound, industry is
regaining its earlier momentum. Services sector continues its near double digit run. Fiscal
consolidation has been impressive. This year has also seen significant progress in those
critical institutional reforms that would set the pace for double-digit growth in the near
future.
3. While we succeeded in making good progress in addressing many areas of our
concern, we could have done better in some others. The total food inflation declined from
20.2 per cent in February 2010 to less than half at 9.3 per cent in January 2011, but it still
remains a concern. In the medium term perspective, our three priorities of sustaining a
high growth trajectory; making development more inclusive; and improving our
institutions, public delivery and governance practices, remain relevant. These would
continue to engage the Indian policy-planners for some time. However, there are some
manifestations of these challenges that need urgent attention in the short term.
4. Though we have regained the pre-crisis growth momentum, there is a need to
effect adjustments in the composition of growth on demand and supply side. We have to
ensure that along with private consumption, the revival in private investment is sustained
and matches pre-crisis growth rates at the earliest. This requires a stronger fiscal
consolidation to enlarge the resource space for private enterprise and addressing some
policy constraints. We also have to improve the supply response of agriculture to the

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expanding domestic demand. Determined measures on both these issues will help address
the structural concerns on inflation management. It will also ensure a more stable
macroeconomic environment for continued high growth.
5. The UPA Government has significantly scaled up the flow of resources to rural
areas to give a more inclusive thrust to the development process. The impact is visible in
the new dynamism of our rural economy. It has helped India navigate itself rapidly out of
the quagmire of global economic slowdown. Yet, there is much that still needs to be
done, especially in rural India. We have to reconcile legitimate environmental concerns
with necessary developmental needs. Above all, there is the 'challenge of growing
aspiration' of a young India.
6. To address these concerns, I do not foresee resources being a major constraint, at
least not in the medium-term. However, the implementation gaps, leakages from public
programmes and the quality of our outcomes are a serious challenge.
7. Certain events in the past few months may have created an impression of drift in
governance and a gap in public accountability. Even as the Government is engaged in
addressing specific concerns emanating from some of these events in the larger public
interest and in upholding the rule of law, such an impression is misplaced. We have to
seize in these developments, the opportunity to improve our regulatory standards and
administrative practices. Corruption is a problem that we have to fight collectively.
8. In a complex and rapidly evolving economy, the Government can not profess to
be the sole repository of all knowledge. Indeed, in a democratic polity, it stands to benefit
from inputs from colleagues on both sides of the House. They must lend their voice and
expertise to influence public policy in the wider national interest. In some areas, good
results depend on coordinated efforts of the Centre and the State Governments and in
some others, on favourable external developments.
9. I see the Budget for 2011-12 as a transition towards a more transparent and result
oriented economic management system in India. We are taking major steps in simplifying
and placing the administrative procedures concerning taxation, trade and tariffs and social
transfers on electronic interface, free of discretion and bureaucratic delays. This will set
the tone for a newer, vibrant and more efficient economy.
10. At times the biggest reforms are not the ones that make headline, but the ones
concerned with the details of governance, which affect the everyday life of aam aadmi. In
preparing this year's Budget, I have been deeply conscious of this fact. I am grateful for
the able guidance of the Hon’ble Prime Minister and the strong support lent by UPA
Chairperson Smt. Sonia Gandhi in my endeavour. I would now begin with a brief
overview of the economy.
I. Overview of the Economy
11. On last Friday, I laid on the table of the House the Economic Survey 2010-11,
which gives a detailed analysis of the economic situation of the country over the past 12
months. The Gross Domestic Product (GDP) of India is estimated to have grown at 8.6

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Budget 2011-2012 Speech of Pranab Mukherjee Minister of Finance February 28, 2011 Madam Speaker, I rise to present the Union Budget for 2011-12. We are reaching the end of a remarkable fiscal year. In a globalised world with its share of uncertainties and rapid changes, this year brought us some opportunities and many challenges as we moved ahead with steady steps on the chosen path of fiscal consolidation and high economic growth. 2. Our growth in 2010-11 has been swift and broad-based. The economy is back to its pre-crisis growth trajectory. While agriculture has shown a rebound, industry is regaining its earlier momentum. Services sector continues its near double digit run. Fiscal consolidation has been impressive. This year has also seen significant progress in those critical institutional reforms that would set the pace for double-digit growth in the near future. 3. While we succeeded in making good progress in addressing many areas of our concern, we could have done better in some others. The total food inflation declined from 20.2 per cent in February 2010 to less than half at 9.3 per cent in January 2011, but it still remains a concern. In the medium term perspective, our three priorities of sustaining a high growth trajectory; making development more inclusive; and improving our institutions, public delivery and governance practices, remain relevant. These would continue to engage the Indian policy-planners for some time. However, there are some manifestations of t ...
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