New Delhi, May 24: As if India Shining was not enough, now there could be All of India Shining.
Bullish about the economy and about his government’s strategies, finance minister Palaniappan Chidambaram today gave the BJP’s disastrous slogan a new lease of life.
“India must shine for all Indians. To declare India is shining was, in my humble view, mocking at the poor of India,” he said on his first day in office.
As Chidambaram promised huge public investments to spur growth, there were also hints that the government would get cracking even before the budget.
“Policy initiatives before the budget are quite possible,” Chidambaram told the media. Ministry officials said these measures were likely to include a balancing act on the oil front — with taxes being cut and prices of petroleum goods raised by less than the 25 per cent increase in global markets.
The market saluted the return of the man they had always loved to the finance ministry with a 162-point rise in the Bombay Stock Exchange sensitive index.
In statements that should win him fans in the Left, Chidambaram spoke of public investment in agriculture, employment generation and manufacturing.
“We have been out of office for some time but have now come back with experience. We want India to shine, but it must shine for all Indians. The poor have voted for this,” he said.
It would not mean an end to reforms. “We are going back to the original reforms of Manmohan Singh,” he said.
Chidambaram emphasised that while making investments, the government would not lose sight of its responsibility to balance its books. “Money will be found and yet we will honour our commitments to fiscal prudence,” he said.
The government has forecast that the fiscal deficit — the gap between expenditure and revenue — would fall to 4.8 per cent of GDP in the year ended March 2004 and 4.4 per cent this year.
But taking into account borrowings by states, the deficit is closer to 11 per cent of GDP, leaving little money for health, education and infrastructure.
While the finance minister did not explain how he would find the money, even as he tightens his purse-strings, officials said he would have to look at innovative methods of funding. He could also slash subsidies of about Rs 50,000 crore a year.
Given Chidambaram’s and Manmohan Singh’s known views on wasteful subsidies, a squeeze is a distinct likelihood. The draft common minimum programme also speaks of “re-targeting” subsidies.
Chidambaram got down to business quickly, asking officials to start working so that a full budget, and not a vote-on-account, could be presented before July-end.
“From Manmohan Singh to Jaswant Singh to Chidambaram, there is not much change in basic policies, it is only the details which will differ. Reforms are set to continue as they have proved to be a winning formula with the economy growing at a fast clip of eight per cent,” his aides said.
Chidambaram seemed to agree: “I have reason to believe that the economy is in a resilient mode in terms of growth, inflation and balance of payments. There is great scope for consolidating the growth momentum.”