Key Features of Interim Budget 2009-2010

INTRODUCTION
􀂄 The Gross Domestic Product increased by 7.5 per cent, 9.5 per cent, 9.7 percent
and 9 per cent in the first four years from fiscal year 2004-05 to 2007-08 recording
a sustained growth of over 9 per cent for three consecutive years for the first time.
The growth drivers for the period were agriculture, services, manufacturing along
with trade and construction.
􀂄 Fiscal deficit down from 4.5 per cent in 2003-04 to 2.7 per cent in 2007-08 and
Revenue deficit from 3.6 per cent to 1.1 per cent in 2007-08.
􀂄 The domestic investment rate as a proportion of GDP increased from 27.6 per cent
in 2003-04 to 39 per cent in 2007-08. Gross Domestic savings rate shot up from
29.8 per cent to 37.7 per cent during this period.
􀂄 The Gross capital formation in agriculture as a proportion of agriculture GDP
increased from 11.1 per cent in 2003-04 to 14.2 per cent in 2007-08
􀂄 The tax to GDP ratio increased from 9.2 per cent in 2003-04 to 12.5 per cent in
2007-08.
􀂄 Annual growth rate of agriculture rose to 3.7 per cent during 2003-04 to 2007-08.
The 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.
􀂄 While manufacturing sector recorded growth of 9.5 per cent per annum in the
period 2004-05 to 2007-08, communication and construction sectors grew at the
rate of 26 per cent and 13.5 per cent per annum respectively.
􀂄 Exports grew at an annual average growth rate of 26.4 per cent in US dollar terms
in the period 2004-05 to 2007-08. Foreign trade increased from 23.7 per cent of
GDP in 2003-04 to 35.5 per cent in 2007-08.
OUTLOOK FOR THE YEAR 2008-09
􀂄 Despite the global financial crisis which began in 2007 impacting most emerging
market economies, 7.1 per cent rate of GDP growth in the current year makes India
the second fastest growing economy in the world.
􀂄 Fallout of global slowdown on Indian economy were countered with fiscal stimulus
packages announced on December 7, 2008 and January 2, 2009 providing tax relief
to boost demand and increasing expenditure on public projects.
􀂄 Government accorded approval to 37 infrastructure projects worth Rs.70,000 crore
from August, 2008 to January, 2009 alone.