Chidambaram’s interim Budget lacks credibility
Essentially, what the Union Minister for Finance P Chidambaram said while presenting the interim Budget (vote-on-account) in Parliament on Monday, with an eye on the lok Sabha election, is that all was well, is well, and will be well — thanks to the supposedly wise stewardship of the economy the Government provided. The bravado is so bogus that it will make even avid Congress supporters flinch. look at the unbelievables that the Finance Minister has offered to the people in the vain expectation that they will take it hook, line and sinker. He has said that the Indian capital market has emerged as one of the better performing markets in the world in 2013 in comparison to the other developing markets; he has claimed that the fiscal deficit is declining; he has boasted that the current account deficit has been contained; he has announced that inflation has been moderated; he has stated that the quarterly growth rate is on the rise; he has expressed relief that the exchange rate is stable; he has pointed out that exports have increased; and he has assured that the fiscal deficit and the current account deficit will be contained within promised limits. Well, the people never knew that the fundamentals of the economy have been this strong in the last one year — and how could they when they had been needlessly occupied with the rise in prices or the growth in inflation or the slowdown in manufacturing or the free fall in the value of rupee or the shrinking employment opportunities! If things have been so very effectively under control, there should have not have been any reason for Prime Minister Manmohan Singh to comment that his Finance Minister had done the best that could be managed in the given grim ‘ground realities'. In that case, since the Finance Minister and the Congress-led UPA Government have been gloating that they have done a marvellous job of managing the economy in the just-to-be-over fiscal year, they must accept accountability for having created in the first place the crisis-like ‘situation on the ground'. But they haven't done that. Instead, both Mr Chidambaram, in his speech in Parliament, and Congress leaders outside, after the Budget speech was done with, have brazenly taken credit for achievements that do not exist and resorted to window-dressing where it is not possible to otherwise hide the ugliness.
While the Finance Minister has proudly mentioned that fiscal deficit for the current financial year will stand contained at 4.6 per cent, what he hasn't added is that he has resorted to some clever but irresponsible accounting. For instance, he has rolled over a fuel subsidy component of Rs 35,000 crore to the financial year 2015, thus keeping his current books clean and effecting an artificial drop in deficit. The food subsidy as a result of the Right to Food Act too has been pruned to Rs 1,15,000 crore, although, because the regime has widened the network of beneficiaries, one would have thought a higher outlay would have been needed. Mr Chidambaram has played with plan and non-plan expenditures. These are among the many desperate measures taken to fudge figures. In doing so, the UPA regime has burdened the successor Government with financial liabilities. But nothing changes the fact that UPA2 has brought economic growth down to a paltry five per cent from a high of eight per cent in UPA1 (this was thanks largely to the robust economy that UPA1 inherited from the NDA Government).