Budget 2019: 'Wobbly' economy needed 'bold' steps, says Chidambaram

Leading the Opposition charge as the Rajya Sabha resumed its discussion on the Union Budget on Thursday, senior Congress leader P Chidambaram said Finance Minister Nirmala Sitharaman’s Budget speech was “insipid”, that it lacked a macroeconomic view and failed to propose any structural reforms.

Chidambaram, one of over 40 speakers to take part in the discussion, said the finance minister inherited a “wobbly” economy from her predecessor, and a weak economy needed “a bold approach” and structural reforms. 

The Congress leader said that he and former Prime Minister Manmohan Singh, whom he credited with undertaking most structural reforms, wished they had such a big majority. He said the Narendra Modi government did not take any bold step despite a “superb mandate”. 

The former finance minister said it was not necessary for the government to say everything in the Budget. He said he expects the government to come back and tell the country what structural reforms it plans to take and how those will improve investment, which is the only engine available to spur India’s growth to 8 per cent this year and to 10 per cent next year.

Chidambaram said he is “perplexed” that the government, the chief economic adviser, and the controller general of accounts have been unable to present a unified picture of what the growth rate would be in the current fiscal year. He said at one place the GDP growth has been projected at 7 per cent and at the other, it is 8 per cent.

Chidambaram said domestic consumption, the only engine of economic growth that was firing, is also sputtering now. He said there was nothing in the Budget that would improve domestic or household savings and no incentive for the middle class to enthuse them to save more.

The Congress leader faulted the government’s revenue projections. He said income tax collection increased by 7 per cent last year, but the projection for this fiscal year is an increase of “23.25 per cent”. “If you will achieve that, you will rank along with an Olympics pole vaulter,” he said.

Similarly, the Customs collection was negative by 8.6 per cent but the projection is 32 per cent; the excise was flat, but the projection is 16.55 per cent. The GST last year increased by 3.38 per cent, but the projection is 45 per cent. He termed these to be “unrealistic projections and unrealistic targets”. He said last year the revenue loss was Rs 1.6 trillion, and the current fiscal year may see a repeat. In such a scenario how would the finance minster achieve her expenditure goals, he asked.

Congress leader said Kapil Sibal said the target of making India a $5 trillion economy was laudable, but a bigger question was improving per-capita income. He said  5,000 high net worth individuals leaving India because of purported harassment by probe agencies was a matter of concern. He accused the government of trying to hide the Rs 91,000-crore IL&FS “scam” to present a healthy picture on NPAs.

On the other hand, the Bharatiya Janata Party’s Prabhat Jha lauded the Modi government for presenting a pro-poor Budget. The Shiromani Akali Dal’s Naresh Gujral cautioned against “flip-flop” in policies if the government hoped to attract FDI.