The Interim Budget highlights the focus on aam aadmi in the development process. The year 2008-09 has seen substantial increase in outlays spanning across sectors.

Continuing the trend, the budget for 2009-10 will have increased plan outlays for key sectors and adequate allocations for the flagship programmes which directly impact aam aadmi.

The other major highlights of the passing financial year were a massive debt waiver for farmers and two stimulus packages to counter the negative fallout of the global economic slowdown. In the Interim Budget presented in the Lok Sabha today, the Finance Minister, Shri Pranab Mukherjee, indicated that 'additional plan expenditure of anything from 0.5% to 1.0% of the GDP' will need to be considered in the regular budget, to be presented by the government after the general elections.

The Growth Trend

The Finance Minister also highlighted that the economy has grown at a healthy rate in the recent yeaRs The Gross Domestic Product has increased by 7.5%, 9.5%, 9.7% and 9% in the first four years from fiscal year 2004-05 to 2007-08 recording a sustained growth of over 9% for three consecutive years for the first time. With per capita income growing at 7.4 percent per annum, this represented the fastest ever improvement in living standards over a four-year period. The growth drivers for the period were agriculture, services, manufacturing along with trade and construction. The fiscal deficit has come down from 4.5% in 2003-04 to 2.7% in 2007-08 and revenue deficit from 3.6% to 1.1% in 2007-08. He further stated that the annual growth rate of agriculture rose to 3.7% during 2003-04 to 2007-08. Foodgrain production recorded an increase of 10 million tonnes each year during this period and touched an all time high of 230 million tonnes in 2007-08. The manufacturing sector recorded a growth of 9.5% per annum in the period 2004-05 to 2007-08, and exports grew at an annual average growth rate of 26.4% in US dollar terms during this period.

Despite the global financial crisis, which began in 2007 impacting most emerging market economies, 7.1% rate of GDP growth in the current year makes India the second fastest growing economy in the world.

Flagship Programmes

Adequate funds have been ensured for the flagship programmes. The National Rural Employment Guarantee Scheme gets Rs 30,100 crore for the year 2009-10. This Scheme generated 138.76 crore person days of employment covering 3.51 crore households in 2008-09.

An allocation of Rs 13,100 crore has been provided for b. This Scheme has made significant contribution in providing access to and infrastructure for elementary education.

Allocation for the national programme of Mid-day Meals in schools has been kept at Rs 8,000 crore in 2009-10. This is the world's largest school feeding programme and has contributed to enhancement of school participation, reduction in class room hunger, and fostering of social and gender parity.

The Integrated Child Development Scheme gets an allocation of Rs 6,705 crore. This Scheme was expanded twice in the last five years to cover the hitherto uncovered habitations across the country.

Rs 11,842 crore have been proposed for the Jawaharlal Nehru National urban Renewal Mission. Under this Mission, 386 projects amounting to Rs 39,000 crore have been sanctioned at the end of 2008.

Rajiv Gandhi Rural Drinking Water Mission is to receive Rs 7,400 crore for supplying safe drinking water to uncovered habitations and slipped back habitations.

Rs 1,200 crore are being provided for the Total Rural Sanitation Programme. Rs 12,070 crore are being allocated to the National Rural Health Mission.

Bharat Nirman, the time-bound plan for building rural infrastructure receives Rs 40,900 crore. This package has six components – rural roads, telephony, irrigation, drinking water supply, housing and electrification.

Agriculture

The Finance Minister highlighted the focused attention given by the Government to the farming sector. The highlights include 300% rise in Plan allocation for agriculture in the last five years and launch of Rs 25,000 crore Rashtriya Krishi Vikas Yojana to increase farm growth to four% per year during the XI Plan.

Credit disbursement to the farm sector has gone up from Rs 87 thousand crore in 2003-04 to about Rs 2.5 lakh crore in 2007-08 marking a three fold increase. Shri Mukherjee announced that the Government will continue to provide interest subvention in 2009-10 to ensure that farmers get short term crop loans upto Rs 3 lakh at 7% per annum.

The Government announced the Agricultural Debt Waiver and Debt Relief Scheme for farmers in the last budget and implemented it by June 30, 2008 as scheduled. The Scheme has been able to restore institutional credit to indebted farmeRs As per early reports, the total debt waiver and debt relief so far, amounts to Rs 65 thousand three hundred crore covering 3.6 crore farmers.

Remunerative prices have been given to farmers for their crops. Since 2003-04, Minimum Support Price (MSP) for the common variety of paddy was increased from Rs 550 to Rs 900 per quintal for the crop year 2008-09. In case of wheat the increase was from Rs 630 in 2003-04 to Rs 1,080 per quintal for the year 2009.

Rural Development

A number of programmes have been designed to help improve the living conditions of rural population. The corpus of the Rural Infrastructure Development Fund has increased from Rs 5,500 crore in 2003-04 to Rs 14 thousand crore for the year 2008-09 ensuring greater availability of funds for developing rural infrastructure.

Under the Indira Awaas Yojana, 60.12 lakh houses have already been constructed by the end of 2008 as against the target of building 60 lakh houses by March 2009.

The Government proposes to substantially expand the Panchayat Empowerment and Accountability Scheme. The Project Arrow, the postal scheme to provide new technology – enabled services to the common man, will also receive full Government support.

Education

The Finance Minister has called 2008-09 as a 'momentous year for secondary education' as several major initiatives including a new Centrally Sponsored Scheme to universalize education at secondary stage were launched during the year.

Outlay on higher education has been increased 900% in the XI Five Year Plan. An ordinance to open 15 Central Universities has been promulgated, 6 new IITs have started functioning, two more IITs are expected to commence their academic sessions in 2009-10, five Indian Institutes of Science Education and Research have become functional, teaching is expected to commence in four out of six new IIMs and two new schools of Planning and Architecture have started functioning.

Since 2004-05 nearly 500 ITIs have been upgraded into centres of excellence and a National Skill Development Corporation has been created to stimulate and coordinate private sector participation in skill development.

Social Sector

Many Schemes have been initiated for women and weak and downtrodden people of the society. A new Ministry of Minority Affairs has been set up and a 15-point programme has been announced for the welfare of the minorities.

The Scheduled Tribes and other Traditional Forest Dwellers (Recognition of Forest Rights) Act has helped in getting to Scheduled Tribes and other traditional forest dwellers legal rights on forest lands.

The authorized capital of the National Safai Karmachari Finance and Development Corporation has been increased. The Finance Minister announced that the authorized capital of the Rashtriya Mahila Kosh will also be strengthened.

The Aam Aadmi Bima Yojana has provided death and disability cover to over 60 lakh rural landless. A Rashtriya Swasthya Bima Yojana for BPL families has also been started. As on January 15 this year, 22 States and UTs have initiated the process to implement the Scheme.

The Finance Minister announced that two new schemes, Indira Gandhi National Widow Pension Scheme and Indira Gandhi National Disability Pension Scheme are being launched in the current year to provide pension to widows and severely disabled persons, respectively. He also proposed to give priority to young widows in admissions to ITIs and to provide stipend and bear training cost.

Financial Sector and Tax Reforms

The Finance Minister informed that the asset quality of Public Sector Banks has improved and non performing assets have declined considerably from 2004 to 2008. He also enumerated the steps taken to promote a safe, transparent and efficient share market and to protect market integrity. He further informed that the Companies Bill 2008 has been introduced in parliament to make the Companies Act a compact law adopted to internationally accepted best practices.

The Government has rationalized income tax rates and steadily reduced customs duty rates. Rates of Union Excise Duties and Service Tax have also been rationalized. Tax administration is being modernized through extensive use of information technology. 109 marine vessels are being acquired form the Customs Department to prevent movement of contraband goods across the country's sea borders.

Budget Provisions

The Budget for 2009-10 will have total expenditure of Rs 9,53,231 crore, comprising Rs 2,85,149 crore under Plan and Rs 6,68,082 crore under non-Plan. The Gross Budgetary Support for the Plan is 17.16% higher than that in 2008-09.

To ensure continuity in financing of rural infrastructure projects, RIDF-XV is being proposed with a corpus of Rs 14,000 crore. The separate window for rural roads with a corpus of Rs 4,000 crore will continue.

To counter the negative impact on exports due to the global financial crisis, the interest subvention of 2% on pre and post shipment credit for certain employment oriented sectors is proposed to be extended.

It is proposed to recapitalise the public sector banks over next two years to enable them to maintain Capital to Risk Weighted Assets Ratio (CRAR) of 12% and to ensure that credit growth continues to sustain economic growth.

The allocation for Defence is being increased to Rs 1,14,703 crore. This will include Rs 54,824 crore for capital expenditure.

A provision of Rs 95,579 crore for major subsidies including food, fertilizer and petroleum has been made in the Budget.
Gross Tax Revenue receipts at the existing rates of taxation are estimated at Rs 6,71293 crore and Centre's net tax revenue at Rs 5,00,096 crore. With revenue expenditure estimated at Rs 8,48,085 crore, the revenue deficit amounts to 4.0% of GDP. Fiscal Deficit is estimated at Rs 3,32,835 crore which is 5.5% of GDP. This would be lower than in 2008-09, but higher than would be appropriate under normal circumstances. The Minister explained: 'However, conditions in the year ahead are not likely to be normal and, therefore, the high fiscal deficit is inevitable. We will return to FRBM targets once the economy is restored to its recent trend growth path.'

 

 

 

Current Affairs 2009: US Presidential Elections

 

The United States presidential election of 2008 was held on Tuesday, November 4, 2008. It was the 56th consecutive quadrennial United States presidential election. Outgoing incumbent Republican President George W. Bush's policies and actions and the American public's desire for change were key issues throughout the campaign, and during the general election campaign, both major party candidates ran on a platform of change and reform in Washington. Domestic policy and the economy eventually emerged as the main themes in the last few months of the election campaign, particularly after the onset of the 2008 economic crisis.

Democrat Barack Obama, then-junior United States Senator from Illinois, defeated Republican John McCain, the senior United States Senator from Arizona. Nine states changed allegiance from the 2004 election. Each had voted for the Republican nominee in 2004 and contributed to Obama's sizable Electoral College victory. The selected electors from each of the 50 states and the District of Columbia voted for President and Vice President of the United States on December 15, 2008. Those votes were tallied before a joint session of Congress on January 8, 2009. Obama received 365 electoral votes, and McCain 173.

There were several unique aspects of the 2008 election. The election was the first in which an African American was elected President, and the first time a Roman Catholic was elected Vice President. It was also the first time two sitting senators ran against each other. It was the first election in 56 years in which neither an incumbent president (Bush was barred from seeking a third term by the Twenty-second Amendment) nor a vice president (Dick Cheney did not seek the presidency) ran. Also, voter turnout for the 2008 election was the highest in at least 40 years.

In 2004, President George W. Bush won reelection, defeating the Democratic nominee, Senator John Kerry. After Republican pickups in the House and Senate in the 2004 elections, Republicans maintained control of both the executive and legislative branches of the federal government.

Bush's approval ratings had been slowly declining from their high point of almost 90% after 9/11, and they were barely 50% after his reelection. Although Bush was reelected with a larger Electoral College margin than in 2000 and an absolute majority (50.7%) of the popular vote, during his second term, Bush's approval rating dropped more quickly, with the Iraq War and the federal response to Hurricane Katrina in 2005 being most detrimental to the public's perception of his job performance.

By September 2006, Bush's approval rating was below 40%, and the Democratic party appeared to have a clear advantage in the upcoming Congressional elections. Additionally, Democrats pulled out several surprise victories in Congress and gained the majority in both houses. Bush's approval ratings continued to drop steadily throughout the rest of his term.

 

Democratic Party nomination Candidates
Barack Obama, U.S. Senator from Illinois
Hillary Clinton, U.S. Senator from New York
John Edwards, former U.S. Senator from North Carolina
Bill Richardson, Governor of New Mexico
Dennis Kucinich, U.S. Representative from Ohio
Joe Biden, U.S. Senator from Delaware
Mike Gravel, former U.S. Senator from Alaska
Christopher Dodd, U.S. Senator from Connecticut
Tom Vilsack, former Governor of Iowa

 

Republican Party nomination Candidates
John McCain, U.S. Senator from Arizona
Mike Huckabee, former Governor of Arkansas
Mitt Romney, former Governor of Massachusetts
Ron Paul, U.S. Representative from Texas
Fred Thompson, former U.S. Senator from Tennessee
Duncan Hunter, U.S. Representative from California
Rudy Giuliani, former Mayor of New York City
Alan Keyes, former U.S. Ambassador from Maryland
Sam Brownback, U.S. Senator from Kansas
Jim Gilmore, former Governor of Virginia
Tom Tancredo, former U.S. Representative from Colorado
Tommy Thompson, former Governor of Wisconsin

Presidential and vice-presidential debates
Four debates were announced by the Commission on Presidential Debates:
September 26: The first presidential debate took place at the University of Mississippi. The central issues debated were supposed to be foreign policy and national security. However, due to the economic climate, some questions appeared on this topic. The debate was formatted into nine nine-minute segments, and the moderator (Jim Lehrer) introduced the topics.
October 2: The vice-presidential debate was hosted at Washington University in St. Louis, and was moderated by Gwen Ifill of PBS.
October 7: The second presidential debate took place at Belmont University. It was a town meeting format debate moderated by NBC News anchor Tom Brokaw, and addressed issues raised by members of the audience, particularly the economy.
October 15: The third and final presidential debate was hosted at Hofstra University. It focused on domestic and economic policy. Like the first presidential debate, it was formatted into a number of segments, with moderator Bob Schieffer introducing the topics.
Another debate was sponsored by the Columbia University political union and took place there on October 19. All candidates who could theoretically win the 270 electoral votes needed to win the election were invited, and Ralph Nader, Cynthia McKinney, and Chuck Baldwin agreed to attend. Amy Goodman, principal host of Democracy Now!, moderated. It was broadcast on cable by C-SPAN and on the Internet by Break-the-Matrix.

 

Campaign costs
The reported cost of campaigning for President has increased significantly in recent years. One source reported that if the costs for both Democratic and Republican campaigns are added together (for the Presidential primary election, general election, and the political conventions) the costs have more than doubled in only eight years ($448.9 million in 1996, $649.5 million in 2000, and $1.01 billion in 2004). In January 2007, Federal Election Commission Chairman Michael E. Toner estimated the 2008 race will be a $1 billion election, and that to be taken seriously, a candidate needed to raise at least $100 million by the end of 2007.

Although he had said he would not be running for president, published reports indicated that billionaire and New York City mayor Michael Bloomberg had been considering a presidential bid as an independent with up to $1 billion of his own fortune to finance it. Bloomberg ultimately ended this speculation by unequivocally stating that he would not run. Had Bloomberg decided to run, he would not have needed to campaign in the primary elections or participate in the conventions, greatly reducing both the necessary length and cost of his campaign, but perhaps also its exposure.

With the increase in money, the public financing system funded by the presidential election campaign fund checkoff has not been used by many candidates. John McCain, Tom Tancredo, John Edwards, Chris Dodd, and Joe Biden qualified for and elected to take public funds in the primary. Other major candidates eschewed the low amount of spending permitted, or gave other reasons as in the case of Barack Obama, and chose not to participate.