Chidambram blames high inflation for UPA's defeat

Chidambaram said the Budget for 2015-16 has not passed the test of equity, fiscal and financial stability

Former finance minister P Chidambaram on Sunday said the fiscal stimulus package inducted between 2009 and 2011 was a collective decision of the government that led to breaching of fiscal and revenue deficits and high inflation for which people punished the United Progressive Alliance (UPA) government in the Lok Sabha elections.

In a speech that analysed the first full budget of the Modi government presented by Finance Minister Arun Jaitley, he said the Budget for 2015-16 has not passed the test of equity, fiscal and financial stability and the test of rising inequality while it had some good aspects.

In his speech at the Loyola Institute of Business Administration (Liba) in Chennai on Saturday, Chidambaram, at no stage, had taken the name of President Pranab Mukherjee, during whose tenure as finance minister the stimulus package was decided by the Union government following the 2008 economic crisis.

In the speech, the former finance minister said Jaitley has pushed the deadline of curbing fiscal deficit to three per cent of gross domestic product (GDP) to 2016-17 by another year to 2017-18.

As against a target of 3.6 per cent fiscal deficit fixed by the UPA government for 2015-16, he has relaxed it to 3.9 per cent of GDP.

Chidambaram said, the National Democratic Alliance (NDA) regime was planning to borrow an additional Rs 42,500 crore which the government was planning to spend not on Plan expenditure but on non-Plan expenditure.