India will increase its spending on primary education, health and rural infrastructure in a budget aimed at improving life for the ordinary citizen.
Fighting poverty and pleasing the government's Communist allies were priorities for Finance Minister Palaniappan Chidambaram.
However a new law stipulating that the budget deficit be cut limited his options, resulting in increased tax for businesses and a restructuring of personal tax.
Will this budget be a boost for the ordinary citizen? Can these measures eliminate poverty? Will economic growth be affected? Send us your views.
This debate has now closed. Thank you for your comments.
The following comments reflect the balance of opinion we received:
The congress is doing its best to uplift India from a developing country to a developed country. And this new budget just proves the dedication of the government to bring the country up. They are also spending on military which shouldn't be done at this moment but it should be realized that India is in the midst of countries having deadly weapons. So a budget should tackle all major areas like education, poverty along with military which is precisely what this new budget has done.
SM, Pathanamthitta, Kerala, India
Isn't it great that politicians are at least thinking about poverty, and actually trying to do something for it.
Shilpa Deshmukh, Mumbai, India
The idea is very good. But the implementation is yet to see. Unless there is a specific path to follow, the task won't be possible. I hope the government will check its status each month to monitor its progress. State governments always divert the federal money to balance their budget rather than tackling the poverty. Kerala's government action of building roads using the money issued for handling the flooding is a good example.
CM, Chicago, US
The budgetary measures will most certainly help with poverty issues, but not eliminate it all together. Poverty elimination in India needs a social revolution; economists cannot, and politicians alone won't fix it on their own. The other major problem not addressed is how to reduce the widening economic gap between rich and poor.
This gap is epidemic in a country where every sixth person on the planet earth is its citizen. It is very ironic that the budget did not suggest/fund any program reducing the population growth in a country where Aids and unwanted pregnancies/childbirth are rampant.
Bhawan, Washington DC
There is no way that any government can beat poverty in India. The population is too big for the government to manage well, when compared to smaller countries like Singapore. The situation will more likely worsen as the population is set to exceed its first billion in the coming years.
One way India can improve or alleviate the situation is to deal with the problem state by state, just like China, gradually opening up more states for foreign investors. This is one of the methods to improve the situation.
Chua Yunjia, Singapore
We are learning to move forward. I personally look at this budget as 'The Basic' to beat poverty in India. I would like to see some accomplishments through this and the ripples to start now. If the plans are executed without flaws, we'll beat poverty even earlier than anyone may predict.
Issac, London, UK
There is a lot of attention given to the national budget. And there will be a lot of opinions by analysts after the budget. Although every budget says it is about poverty eradication and all that, right from my childhood I have seen a lot of poor people without shelter somehow managing to live on the roads. They are still there and the numbers are obviously increasing, and whatever the budget is they will still be there throughout India for many years to come.
The budget may be billions but what reaches the poor will only be a few thousand. The rest will be going to all those in between the source and the destination. Unless this corruption is not handled, whatever the budget is, it will not any positive impact on anybody in India other than ministers.
Joppu Jose, Bangalore, India
I can't think of a country that taxed and spent itself to prosperity. Unfortunately by raising taxes India will just send the jobs they need to other countries.
Eric Morris, Cary, NC, USA
Planners and budgets over the last four decades have been giving means for uplifting the poverty line. However bureaucracy and corruption has time and again proved gobbling 93% of resources and only 7% being utilized. If these two firewalls can be controlled then the budget provisions will succeed.
Avinash Joshi, Pune, India
Of course not. The law, financial decisions and every other decision were taken with a view that poor will benefit since the independence of India. But the poverty has increased many folds since then. No budget, government etc. can eradicate poverty, it is the society, the people who have to eradicate the poverty. Unless there is a real change in the culture and mindset of the citizens at large the poverty cannot be beaten. The budget is just a nutritious diet for the poverty which in turn will grow stronger rather than being beaten.
Kaushik Vishwakarma, Mumbai, India
All these big plans are a simple waste if corruption remains.
Until Indians come out of their feudal mindsets all attempts to reduce poverty will prove futile. Overpopulation, caste system, baseless superstitions and overtly religious attitude all are results of the feudal mindsets. This makes it very difficult to bring in change of any kind.
Dipesh, Calcutta, India
Yes, indeed this budget will beat poverty of India.
Abraham Oommen, Mumbai, India
Where in the world has a budget beaten the poverty? Policies and programs do. India has been doing what is needed and what is right for her. Sitting elsewhere it's easy to tell what India should do and what she shouldn't.
Pratheep P S, Mysore, India
I think poverty in India is on a decline but the rate of decline is very slow. India needs innovative approach towards agriculture and a firm, strong policy for population control. With the current democratic set up it is hard for any political party to impose strict laws to control population like the ones imposed in China. Maybe the saying 'slow and steady wins the race' applies to India.
Vivek Kulkarni, Cleveland, USA
India's poverty is very closely related to its population growth. If the growth curve plateaus even for a period of 5 - 10 years the benefits would be clearly visible.
Rahul Khosla, USA
The Finance Minister is a great person always trying to solve the common man's problem. Spending alone will not improve the ordinary citizen. Accountability and effectiveness of this spending will enable it to reach the common people in the rural sector. Caste system and religious conflicts should be removed with proper education at primary level. Upper caste hardliners and religious fundamentalist should be eradicated.
Poverty in India will be rare soon not because of government's effort because of people's will and hard work. I can say this because I have been on these steps. And I have seen the same energy within others and them being better than before. It comes from ethics and education that our parents insisted on us.
India is typically Third world. Fundamental reforms in agriculture, industry, education and family planning are essential in order to address the massive disparity that exists betweens the country's poor and recently expanding middle class. The latter must keep growing and former shrinking. In conclusion a massive co-ordinated multi disciplined national strategy is necessary in India.
Ciaran Fleming , Dublin, Rep of Ireland
The commitment of this government to reduce poverty and improve the quality of life is reflected not only in the massive health, employment and education drive but also in the insignificant increase in defence expenditures. Power to a nation doesn't come with more missiles and tanks but with the empowerment of its greatest resource - the people. For as long as can be remembered our burgeoning population has been our liability. The increased spending on primary education, health and rural infrastructure is an attempt to turn this liability into our greatest asset. Kudos to Mr Chidambaram!
Ajit, Kanpur, India
Things are definitely moving in the right direction. New tax structures really make sense. Even though the tax on cash withdrawals of more than R10,000 a day is a good step towards checking black money and corruption but perhaps an even better way would be to encourage the use of plastic money in day to day transactions over cash.
Deepak Angra, Torquay, UK
Socialist ideology has always failed to alleviate poverty and illiteracy, a time tested fact. This time will be no different. A wasted opportunity for failing to implement market economy.
Poverty will only increase, even if more slowly, and quality of life will invariably decline, if population growth is not reversed. India, similar to many nations, must reduce its population to that level where quality of life is maximized for every person. Anything less than that is simply an abuse of its own people and the creation of a future that no-one can really live in. Exporting people is not an answer. A sustainable population within the limits of India's own capacities is the answer.
John Holmes, Canada
Why India is becoming back office of the world is because of its educated youth. Getting more people to start learning at an early age is a plus. Rural infrastructure will create some jobs. However a significant percentage of India's GDP still comes from agriculture which is not taxed. I doubt with unpredictable monsoons and ancient techniques, it's going to improve the output. We need to move towards a services based economy balanced with agriculture. Workers in agriculture sector are not organised and often get paid less for hard work. Only industrial job opportunities can help alleviate poverty.
Prasad, Milton Keynes, UK
It was a difficult year and the budget shows that. Great balancing act by the Finance Ministry given the less than average monsoons, higher oil prices and tsunami and other natural disasters. This budget will stand good in the long run.
Srirangan, New Delhi, India
It is positive to see that the budget will increase the spending on social sectors. The most important thing is to cut the deficit otherwise it will be impossible to do something about the infrastructure. India has to expand the tax base and reforms must speed up. We all know that India has a long way to go and deep down inside one also knows that it will be impossible to save one billion people.
Sandip Savasadia, Karlskrona, Sweden
A Chinese proverb says a journey of a thousand miles begins with a single step. This is clearly a step in the right direction but only a step. Until India resolves cultural problems like its caste system, religious conflicts, and the way women are treated, it can never significantly reduce poverty. The problem is vast and there is far more to be done like continued liberalization of the economy and the building of modern infrastructure. Even optimists would have to concede it will take generations under the best of circumstances.
In response to typical clichés from Mark, USA such as "get rid of the caste system": The left parties need to take their cue from China and its leader Zhao Ziyang who paved the way for flexible labour policies. When this happens India can achieve a growth rate of 10%. Caste attitudes like racism can't simply be wished away but their effects can be mitigated by sound economic policies. Moreover, the situation of women will improve as the economy grows. The old India is gone and poverty will be beaten.
V Narayan, Sweden
Poverty, especially in India has to be tackled on three fronts together. The government now is only doing it on one front, which is governmental economic policy. The other two battlegrounds are fighting government corruption so that every one of the tax monies is being put back out for the population and not being absorbed by the elected middleman. The final issue to be tackled is to fight population reduction - for obvious reasons. In agreement with Mark, USA (above), "It is a step in the right direction, but still only a step."
NJP, New Brunswick, NJ, USA
I'm working here in healthcare development and I agree with Mark, USA (above). Poverty has a social context. And very little of this money will end up in the right place, through lack of management and corruption. The poor themselves will not be involved in the decisions that will affect their lives. This has happened before; large amounts were spent during the national health policy-based expansion of the 70s.
This system is now hopelessly inadequate, particularly in rural areas. Centralised planning does not work well in a state as large, complex and diverse as India. And until realistic bottom-up development programs are in place, this money will just be funding another cycle of waste and suffering.
Evelyn, Jodhpur, India