Wednesday, March 1 2006 01:48 Hrs (IST) - World Time -

New Delhi: Economic growth, the best antidote available for poverty, was the aim of Budget 2006-07, Finance Minister P Chidambaram said today (Feb 28 2006), as he discounted opposition criticism that it was "pro-rich."

The Finance Minister told sources that it would help hold price line, which hit the common man most, and also contained a number of measures to help farmers, including short-term lending at concessional interest rates.

"The common farmer is not a rich man and short-term crop loans at concessional 7 per cent interest aid at helping indebted small farmers," he said, adding "we will try to keep inflation rate below five per cent. Allocation to core sectors are intended to growth."

He pooh-poohed the criticism that fiscal consolidation has been given a go-by and said that in fact fiscal deficit is less than the targeted 4.1 per cent of GDP in 2005-06 and the Budget has promised to bring it down to 3.8 per cent of GDP in 2006-07, keeping in line with the Fiscal Responsibility and Budget Management Act parameters.

He said the one-by-six formula has been withdrawn as it has outlived its utility and served its purpose during the nine years. There are now other sharper instruments like Annual Information Return, which is being expanded, to check tax evasion. Due to the one-by-six formula, the tax net has been widened.

On the four-year roadmap for introducing Goods and Service tax to replace present excise duty and service tax, Chidambaram said he wanted to be realistic as state-level VAT is yet to be implemented by all states.