The government plans to cut its subsidy bill to under 2% of the gross domestic product (GDP) in 2012-13, Finance minister Pranab Mukherjee said in his budget speech on Friday. High crude oil prices and burgeoning fertilizer subsidies, primarily on account of imported non-urea fertilizers, have meant India’s subsidy bill has zoomed to Rs2.16 trillion, or 2.5% of the GDP. Mukherjee has set an ambitious target to reduce this to under 1.75%...

Food subsidy allocation in the budget for 2012-13 is way short of what is required for the implementation of the proposed National Food Security Act, despite a categorical assurance by Finance Minister Pranab Mukherjee that the government would “fully provide” food subsidy to administer UPA's flagship legislation. In fact, the regular food subsidy requirement has been cut. While declaring that the government proposed to phase out subsidies in fertilizer and petroleum...

-The Hindu The budget focuses on rural development with a moderate hike in allocation, but the government has downsized in a big way the importance of its flagship programme, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), on which it reportedly galloped to power in 2009. For the scheme entitling jobs to below poverty line (BPL) households in rural areas, the allocation has been reduced by 17.5 per cent to only...

-IANS Finance Minister Pranab Mukherjee Friday announced a hike of over 21 per cent in the budget allocation for providing free and compulsory education to children below 14 years.  "I proposed an increase in allocation by 21.7 per cent for RTE ( Right to Education) -Sarva Shiksha Abhiyan to Rs.25,555 crore," Mukherjee said in parliament.  The Sarva Shiksha Abhiyan is implemented in partnership with state governments and covers nearly 192 million children across...

Sounding a note of caution, the Economic Survey has stressed that for “growth to be inclusive” India must create adequate employment opportunities—a call that underlines existing inequality, including urban-rural income disparity, and concern that it may increase as more young people enter the job market. While India’s unemployment rate has dropped from 8.2% in 2004-05 to 6.6% in 2009-10, the number of jobless is still huge in absolute terms. The...