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Fiscal Policy
The UPA government commits itself to eliminating the revenue
deficit of the centre by 2009, so as to release more resources for
investments in social and physical infrastructure. All subsidies will
be targeted sharply at the poor and the truly needy like small and
marginal farmers, farm labour and the urban poor. A detailed
roadmap for accomplishing this will be unveiled in Parliament
within 90 days. The UPA government will not cut deficits by
reducing or curtailing growth of investment and development
outlays.
The UPA government is pledged to the early introduction of VAT
after all the necessary technical and administrative homework has
been completed, particularly on issues like the integration of service
sector taxation and compensation to states. It will initiate measures to
increase the tax: GDP ratio by undertaking major tax reforms that
expand the base of taxpayers, increase tax compliance and make the
tax administration more efficient. Tax rates will be stable and
conducive to growth, compliance and investment. Special schemes to
unearth black money and assets will be introduced.
The UPA government will take effective and strong measures to
control the price hike of essential commodities. Provisions to deal
with speculators, hoarders and black- marketeers under the Essential
Commodities Act will not be diluted in any way.
Capital Markets
- The UPA government is deeply committed, through tax and other
policies, to the orderly development and functioning of capital
markets that reflect the true fundamentals of the economy. Financial
markets will be deepened. FIIs will continue to be encouraged while
the vulnerability of the financial system to the flow of speculative
capital will be reduced. Misuse of double taxation agreements will
be stopped. Interests of small investors will be protected and they
will be given new avenues for safe investment of their savings. SEBI
will be further strengthened. Strictest action will be taken against
market manipulators and those who try to deliberately engineer
market panic.
Economic Reformsy
- The UPA reiterates its abiding commitment to economic reforms
with a human face, that stimulates growth, investment and
employment. Further reforms are needed and will be carried out in
agriculture, industry and services. The UPA's economic reforms will
be oriented primarily to spreading and deepening rural prosperity, to
significantly improving the quality of public systems and delivery of
public services, to bringing about a visible and tangible difference in
the quality of life of ordinary citizens of our country.
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