After presenting a $185 billion union budget for the next fiscal, Finance Minister P. Chidambaram on Friday said his proposals will push India's growth further and spur investment.
"This budget will stimulate investment and growth and this growth will create wealth," Chidambaram said soon after presenting what was his seventh budget and the fifth for the present government.
"This budget is all about creating wealth and distributing wealth," he said at the post-budget press conference at the Taj Palace Hotel.
"A growth of 8.8 per cent is not a joke. My predecessor in the National Democratic Alliance (NDA) government had (recorded) a growth of three per cent and six per cent," the finance minister added.
Chidambaram had predicted an 8.8 per cent growth for the economy for this fiscal, even as the economic survey he tabled in parliament on Thursday had forecast India's growth at 8.7 percent.
The minister, who stunned opposition parties with a $15-billion loan waiver scheme for an estimated 40 million farmers, said the move addressed one component - pushing farm growth.
"Credit is only one element of the story in the farm sector. I provided more credit. Budget can only address the credit side," he said, indicating some more schemes were in the offing in the coming months.
"We have a high growth rate," Chidambaram replied, when asked how he will finance the scheme. "This money may or may not come to the banking system. But we will provide liquidity to the banks," he said.
"It does impose on the system a large burden. But if you shun instant analysis, you will find that we have strengthened the system rather than weakened it."
Chidambaram was confident that the loan-waiver scheme would also stimulate growth in the medium term and gave his reasons.
"If we can find a way to write off these loans, providing this money to the banking system, the banking system then would have additional Rs.60,000 crore (Rs.600 billion) to lend," he said.
"This will have a multiplier effect and stimulate the economy."
Even as the opposition dubbed the one-time loan-waiver scheme an eye-wash, Prime Minister Manmohan Singh said it was in line with the commitment made to farmers to address their woes.
"I sincerely believe the government has been generous in its response. It is an unorthodox response," the Prime Minister said, soon after the budget was presented in Parliament.
"But considering the amount of depression prevailing in the agriculture sector, this is a response mechanism that is justified," Manmohan Singh added.
At the press conference, Chidambaram also sought to dismiss the popular opinion that he had presented a budget that was populist and aimed at the upcoming elections to several states and the Lok Sabha.
"Any budget can be called an election budget."