We've done a rescue act to pull economy back: FM

Hitting at critics of the United Progressive Alliance (UPA) government's management of the economy, Finance Minister P Chidambaram on Tuesday said the government had "pulled back" the economy from a difficult situation and put it back on a high-growth path.

Rejecting description of his interim Budget as populist, he said the government was over the past couple of years trying to do a "rescue act", like every other government in the world. "To put it plainly, over the past few years, we are trying to do a rescue act like every other government. I am at pains to emphasise that we are not alone. Every finance minister says he is engaged in a rescue act. Therefore, what I did in Budget 2013 and what I have proposed in the interim Budget 2014 must be seen as part of getting growth back when the world economy is fragile. I think we have succeeded in a fair measure," Chidambaram told PTI in an interview. He said the economy had "clawed back" (growth rate of) 4.4 per cent in the first quarter and 4.8 per cent in the second; and, going by the Central Statistics Office's (CSO's) estimates, was set for at least 5.2 per cent in the third and fourth put together.

"Very few countries have been able to do this over the past 18 months. Therefore, while I am not entirely pleased with what we have been able to achieve, I must emphasise that we have achieved our goals in fair measure and if the government follows the 10-point agenda that I laid down towards the end of my speech, we will get back to the high-growth path," he said when asked how he would define his Budget.

Told his critics would say the problems in India were not only due to international situation, he said: "I did not say that either. But the problems in India and the problems in every country of the world are largely due to the international situation."

He acknowledged some mistakes had been made that in the past. Asked what those were, Chidambaram referred to economist T N Srinivasan, who had written a monograph that said the first stimulus package was perhaps necessary, but deeper analysis might have shown the second and third packages were not necessary.

"But that is a judgement he makes in hindsight. Given the circumstances then, given the data available then, a decision was taken to have three stimulus packages in succession. There were clearly benefits out of the three packages. The growth rate was above eight per cent. But the downside was that the fiscal deficit limits were breached and inflation went almost out of control. In hindsight, some things are clear. But what human beings don't have is luxury of hindsight," he said.

Asked what in hindsight went wrong, he said: "In hindsight, I would have said, despite the slowdown, despite the threat of a slowdown, perhaps we should have stuck to the fiscal consolidation path, with only some minor or temporary relaxation. That is in hindsight."

On what his successor would inherit, he said: "He will inherit an improved economy, a more stable economy and an economy that is growing. He will also inherit a world that is turbulent."

To reactions to his interim Budget, he said: "A vote-on-account is usually expected to be a non-event. But the reactions to the Budget mean we must have done something to catch the imagination of both our supporters as well as critics. The points we have made in the Budget have gone home."

He said the points made in the Budget have not gone unnoticed. "I am pleased with the fact that the points I made have gone home. They have not gone unnoticed. The worst thing that can happen to either a politician or to an event is that it goes unnoticed."