Charging the previous National Democratic Alliance government with fiscal extravagance, Finance Minister P Chidambaram on Monday said the United Progressive Alliance government has retrieved the lost ground and promised to keep tax rates "moderate and stable" to keep up the investment boom.
"Some ground was lost on the fiscal front during the previous government. We tried and retrieved that lost ground," he said adding fiscal deficit, which touched a high of 6.2 per cent of GDP in 2001-02 has been brought down to 4.1 per cent, same as that in 1996-97.
Winding up the discussion on the General Budget in Rajya Sabha, he said the economy was on a "virtuous growth path" and the 20 per cent revenue growth since 2004 would ensure availability of resources for social and infrastructure sectors.
Nothing should be done to hinder the booming investment climate, the finance minister said.
Noting the states were sitting on huge cash reserves due to increased devolution of funds, Chidambaram appealed to them to spend from day one of the new fiscal year, that is April 1, to ensure that the investment tempo is maintained.
In the first year of UPA government, Rs 74,000 crore (Rs 740 billion) were devolved to states which went upto Rs 94,400 crore (Rs 944 billion) in 2005-06 and Rs 1,13,448 crore (Rs 1134.48 billion) in 2006-07, he said.
Chidambaram said central ministries and departments have also been directed to spend from the beginning of the year to avoid bunching of expenditure and warned that ministries not spending 66 per cent of allocation in the first nine months would be penalised.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
