Budget India 2009-2010 by Pranab Mukharjee

Budget for the current year is due on July first week. Two weeks back, reserve bank of India said the new UPA government should avoid another stimulus package. According to RBI, fiscal consolidation is not possible by then. RBI also possesses a strong opinion that the fiscal stimulus packages and other measures initiated by the government to moderate the blow of global financial crisis on the country have lead to a spiky rise in expenditure and fiscal deficit. According to RBI, high deposit rates have not allowed banks to reduce lending rates in quick succession consistent with the growth and inflation outlook. Since the inflation reached to very much lower level, deposit rates cut and lending rates cut required for the stable economy. But policy changes should be in accordance with the global crisis. This is creating a terrible problem for Indian economy. But RBI is positive and optimistic. RBI is expecting a speedy recovery of economy in India. India is not depending much on merchandise exports. GDP is now less than 15% and India is having a smooth functioning financial system. India also have comfortable forex reserves.