Will Government bite the bullet in Budget 2014?

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Taming food inflation need of the hour
Finance Minister Arun Jaitley will be presenting the new Government's maiden budget on July 10 as the country faces high inflation, particularly in food prices and high fiscal deficit. Apart from that with indications of EL Nino weather phenomenon which is an indication of bad monsoon and the recent Iraq crisis has further added to Government's woes which may result in surge in crude oil prices.

Apart from these economic challenges, Mr Arun Jaitley who is also Minister of Defence and corporate affairs faces challenge of slow process in the acquisition of weapons in the Defence sector, with not being able to meet the requirement of the armed forces.

Infrastructure is another important sector in which the Government may look forward to create new investment opportunity to compete with the global market. The Government is likely to introduce infrastructure business trust method to encourage investment with help of public-private partnership to build large pending projects. These trusts will be registered under SEBI and offered range of tax incentives.

The NDA Government should also give a right signal on FDI(foreign direct investment) in retail, defence, railway and infrastructure sector. Though BJP clearly promised FDI in certain sectors to generate employment but Minister of commerce(independent charge), Nirmala Sitharaman has clearly ruled out FDI in retail sector."

While 1,000 crore more money was allocated to Nirbhaya Fund in the interim budget under UPA, little was done by the Government for the safety of women in the country. All eyes will be on the Narendra Modi Government who has constantly mocked Congress for not using a single penny from the Nirbhaya Fund allocated for the safety and security of women. Infact, recent Badaun incident which even got the attention of international media and UN which raised serious concern on the safety and sanitation for women in India. The United Nation condemned the violence of girls and women across India and termed it appalling and a human right's issue. The budget 2014 should definitely have some plan to implement if funds allocated for women.

The UPA Government had allocated Rs 1200 crore additional assistance to in their last interim budget to North-East States. But Prime Minister Narendra Modi who has addresses multiple rallies across North-East in his election campaign may have a comprehensive vision for the overall development of the seven sisters. The Finance Minister may talk of development projects in several parts of Assam, Arunachal Pradesh, Manipur and Tripura like effective water management, solar and wind energy, etc

NDA Government should also give a right signal on FDI

As Prime Minister Narendra Modi who has already hinted of bitter medicine to cure the floundering state of economy, the 14% hike in rail fare ahead of the rail budget to be announced of July 8 seems to be one difficult move by the NDA Government. Railway Minister Sadananda Gowda is already facing the heat across all political spectrum including MPs from Shiv Sena and BJP. Apart from the fare hike some significant challenges are infront of the Government which needs to be addressed in the budget.

Firstly, safety and security of passengers and increase in the number of accidents needs to be raised. In the last few months several fatal accidents has been witnessed with todays derailment of Rajdhani Express and passenger train in Bihar. Also, passengers safety can also be ensured by installing CCTV cameras and alarms from any possible terror or Maoist threat. Safety of women travellers is also a concern which can be ensured by increasing number of RPF personnel onboard. Fleet modernization, track expansion, encouraging FDI are some of the issues which probably Mr Sadananda Gowda needs to address.

Health sector is another important sector which the Government will look after in the 2014 budget. Health Minister Dr Harsh Vardhan has already talked about bringing AIIMs in every State to improve medical facilities. Also Narendra Modi Government is likely to bring a number of drugs under price control ambit which will plunge their prices by 10 to 15%.
Price rise will be the focus of this budget with Government already under pressure over food inflation.

"It is difficult to keep household budget under control as prices of essential vegetables and fruits are constantly rising. We can't avoid eating essential commodities like potato, onion, tomato which are used in every dishes,"says Jasmeet, a homemaker who lives in south Delhi. On being asked about her expectations from Finance Minister Arun Jaitley in the budget, she says I just want him to check hoarders which is resulting in rise in prices.

The need of the hour for the Government is to bring the nation back on the growth track to attract investments. Finance Secretary Arvind Mayaram recently said that the country should prefer FDI route over FII for economic growth.

"I believe our potential growth rate is 8 per cent. And to get their, we need to develop resources. And that which cannot generate domestically must come from outside and if it comes from outside then we prefer it in the form of foreign direct investment(FDI) rather than foreign institutional investment(FII)," Mayaram said.

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