Chennai: The Rs 600bn loan waiver given to farmers in the Union Budget was a way for India to repay its debt to them, Finance Minister P. Chidambaram said here.

"The way to look at the proposal is that India is repaying its debt to its farmers," Chidambaram said at a public meeting organised by the Tamil Nadu Congress Committee (TNCC) to explain the features of the Budget.

He said he would inform parliament as to how the banking sector would be compensated to the extent of farm loan waiver.

According to the minister, the philosophy of the union budget for 2008-09 was the simple economic theory - consumption drives production, which in turn leads to higher investment.

"This economic cycle is like a Vishnu Chakra that rotates continuously. The Budget aims to put more money into people's pocket by increasing the income tax limits, reducing excise duties and increased allocations for various sectors."

According to him, the various Budget proposals are aimed at putting extra money in the hands of people to enable them to spend so that the slowdown in the global economy does not impact India.

Appearing to have switched on the election button by addressing a meeting specifically to highlight the positive features of his budget, Chidambaram took a dig at the opposition, "All budgets that have people's welfare in mind will be termed election oriented."

"All the budget announcements should be viewed holistically to get the quintessence of the budget proposals," he added.

Comparing the 5.9 per cent average economic growth rate logged by India under Bharatiya Janata Party (BJP) government earlier, he said, "The four years of UPA (United Progressive Alliance) rule saw the economy growing at an average 8.8 per cent."

"The aim of the Budget is to sustain the 8.8 per cent economic growth. When that happens, the additional employment generation will be 10 million and the individual income would double in a decade," he said.

Source : IANS