Government fails to crack the whip on rising prices

The government has failed to crack the whip on price rise. "The inflation is expected to remain at around 10.7 per cent instead of the budget's projection at seven per cent," according to the Economic Survey that Finance Minister of the caretaker government Surendra Pandey today tabled in Parliament.
"Similarly, the gross domestic product (GDP) growth has been revised to 3.5 per cent from an estimated 5.5 per cent due to low agriculture yield that was at four per cent in 2008-09," said the survey that has estimated the agriculture sector's growth to remain at 1.2 per cent. The agriculture sector contributes 33.03 per cent to the GDP, according to the pre-budget economic survey.
The survey said construction, commercial services like real estate, leasing and other services, manufacturing, and hotels and restaurants sectors could grow at higher pace than in the last financial year.
The survey has accepted government intervention as the key to address obstacles in accelerating economic growth.
"Government finance situation is satisfactory," said the survey that has estimated revenue mobilisation to grow by 24.6 per cent. Encouraged by the revenue mobilisation, the government has also revised the revenue target upwards to Rs 190 billion from the budgetary estimate of Rs 176.73 billion.
Pandey had presented an accommodative budget of Rs 285.93 billion for 2009-10, with Rs 46.34 billion deficit.
Normally, the Economic Survey is tabled in Parliament a day before the General Budget but due to political deadlock, the Finance Minister will present a Special Budget tomorrow.
He will present an estimation of expenditures and revenue projections, with no changes in tax rates or new policy measures for four months.
The Special Budget will help the government to spend 'not exceeding one-third of the last year's budget'. The government is forced to bring the Special Budget as a temporary arrangement to allow itself to carry on with routine expenses and revenue collections in the new financial year, starting from July 17. Economic policies of the last budget gets continuity until a full-fledged budget is brought by the new government.
It will be the second time after the Constituent Assembly (CA) election that the government has failed to present a full-fledged budget.
Earlier, former finance minister Dr Ram Sharan Mahat had brought such Special Budget in July 2008.
The next finance minister will have a daunting task to tame inflation; check intimidation and threat against business community, create investor-friendly environment, provide security for the investment, and push the plummeting exports up to bridge the widening trade gap.

Sector wise contribution to GDP (2009-10)
Agriculture and Forestry – 33.03 per cent
Wholesale and Retail Trade – 13.97 per cent
Transport, Storage and Communication – 9.76 per cent
Real Estate, renting and business activities -- 8.26 per cent
Education – 6.67 per cent
Construction – 6.64 per cent
Manufacturing – 6.25 per cent
Financial Intermediaries – 4.07 per cent
Hotels and Restaurants – 1.67 per cent
Public Administration and Defence – 1.99 per cent
Electricity, Gas and Water – 1.49 per cent
Health and Social Work – 1.46 per cent