New Delhi, Feb. 17: P. Chidambaram’s last budget before the general election went easy on populism but politics was never far away from the surface.
He cited statistics to claim the UPA’s 10-year-old rule had far outstripped the NDA’s record, countered the profligacy charge against the Congress by chanting the fiscal consolidation mantra, and heaped scorn on Narendra Modi both on the economic and political fronts.
Congress leaders felt the Union finance minister had made the most of the limited opportunities offered by a vote-on-account.
Chidambaram rejected the BJP’s pet charge of policy paralysis, indirectly blaming Modi for the UPA government’s failure to introduce the GST (goods & services tax).
“Revenues are of paramount importance. The best source of revenue is taxes and for that we need modern tax laws. I am disappointed that we have not yet been able to introduce GST,” he said.
“I leave it to you to answer the question, who blocked the GST when an agreement on the game-changing tax reform was around the corner?”
The allusion was to the Gujarat chief minister, at whom Prime Minister Manmohan Singh had in the past levelled a more explicit accusation on the issue.
Chidambaram had further charges against the BJP.
“I regret to record my disappointment that the Insurance Laws (Amendment) Bill and the Securities Laws (Amendment) Bill have not been passed by Parliament for reasons that have nothing to do with the merits of the bills,” he said.
“Since we will run a current account deficit every year for some more years, it can be financed only by foreign investment, whether it is FDI or FII or ECB (external commercial borrowing) or any other kind of foreign inflow. Hence, there is no room for any aversion to foreign investment.”
The BJP has not only opposed FDI in retail but threatened to reverse the decision.
Chidambaram said: “I hope that domestic experts will now agree that the UPA government meant what it said when it put fiscal stability at the top of the agenda. Going forward, I appeal to all political parties to join me in the pledge that we shall not — we shall never — do anything that will affect the stability of the foundations of India’s economy.”
He further targeted Modi without naming him.
“Democracy acknowledges diversity, respects dissent, encourages debate, and decides through a government of elected representatives. Neither populism nor majoritarianism nor individualism is an alternative way of governance,” the finance minister said.
“In the ten years that I have been in North Block, I have seen the best of times and difficult times. Never did I lose faith in Jawaharlal Nehru’s idea of India that, in the words of Sunil Khilnani (London-based professor of politics who wrote The Idea of India), ‘sought to coordinate within the form of a modern state a variety of values: democracy, religious tolerance, economic development and cultural pluralism’.”
He continued: “It is with that faith that I shall remain on the bridge until the day when, I am sure, the people of India will entrust the responsibility to a hand that will hold the sceptre swayed with equity.”
Chidambaram played up the UPA’s championing of the poor but, in the same breath, stressed fiscal prudence.
“Our way of governance has not come in the way of lifting 140 million people out of poverty in the last ten years and that is the greatest achievement of the government,” he said.
But he pleaded that every political party should try to ensure that the fiscal deficit remained within three per cent of the GDP and “subsidies that are absolutely necessary be given to only the absolutely deserving”.
The finance minister claimed credit for moderating inflation — the wholesale price index was 5.05 per cent in January 2014 — and sustaining the funding of the UPA’s flagship programmes in the social sector.
He accepted Rahul Gandhi’s demand for “one rank, one pension”, a longstanding demand from retired military personnel, and gave details of the initiatives the government had taken for the minorities, women and the youth.
Chidambaram said the number of bank accounts the minorities had had risen from 1,415,000 ten years ago — when they were concentrated in certain districts — to 4,352,000 in March 2013 and that the volume of lending to them had soared from Rs 4,000 crore to Rs 66,500 crore.
“Ten years ago, only 971,182 women’s self-help groups had been credit-linked to banks but now 4,116,000 have been provided credit,” he said.
Announcing the easing of the education loan that would benefit nine lakh students, he said: “Ten years ago, only a few thousand students — mostly the well-connected — got education loans. At the end of December 2013, public sector banks had 2,570,254 student loan accounts and the amount outstanding was Rs 57,700 crore.”
He cited improvements in the past decade, which amounted to a comparison between the tenures of the UPA and NDA governments.
While food grain production was 213 million tonnes 10 years ago, it was 263 million tonnes today; the installed power capacity had risen from 112,700MW to 234,600MW; annual coal production was up from 361 million tonnes to 554 million tonnes; rural roads from 51,511km to 389,578km; the Centre’s expenditure on education was up from Rs 10,145 crore to Rs 79,451 crore and that on health from Rs 7,248 crore to a projected Rs 36,322 crore.