From Global Growth:

India's coalition government today announced a liberalising budget aimed at helping the poor, saying it wanted to ensure the nation's new prosperity brought "relief to the common man."

The budget continues India's liberalisation, income and corporate taxes were reduced, tariffs were slashed and the economy is to be furthered opened up to foreign capital. The government's goal is "to eliminate the scourge of poverty," Finance Minister P. Chidambaram told parliament as he earmarked 250 billion rupees ($5.7 billion) for social programmes in his second budget since the Congress party won power last May...

Chidambaram said there was a strong case for relaxing limits on foreign direct investment, a step to which the Left is particularly hostile, and proposals would be made "after consultation." He urged parliament to take a "pragmatic view" on foreign investment, noting China had received $60 billion in foreign investment money in 2004. India, by contrast, received less than $4 billion. He slashed tariffs on a range of items from fuel to non-agricultural goods such as textile machinery to bring duties in line with other Asian nations.

He targeted growth at 6.9% for the year ended March 2005, making it the second fastest growing economy after China. The figure was lower than the previous year's 8.5% due to patchy monsoon rains, but he said "the engines of the economy are running at nearly full speed."