The Hindu Business Line : Irresponsible budget, says Yashwant Sinha

Chennai, March 4 The former Union Finance Minister and Member of Parliament, Mr Yashwant Sinha, has termed the recent Budget “irresponsible” and “anything but honest”, and said the Budget raised the level of competitive populism in the country.

Stressing that he was not against the Rs 60,000-crore loan waiver, Mr Sinha said that if the BJP came back to power, it would waive the loans due by farmers to private money lenders also.

Speaking at a post-Budget discussion, organised here by the Madras Chamber of Commerce and Industry (MCCI), Mr Sinha pointed out that the Finance Minister has neither provided for the loan waiver, nor for the imminent expenditure that would arise out of the Sixth Pay Commission. He observed that the recent Railway Budget had provided for the Pay Commission-related salary hikes, which according to Mr Sinha, would have been cleared by Mr Chidambaram.

“Yet in his own budget, he has not provided for the Pay Commission,” he said, adding, “I can’t imagine anything more irresponsible than this.”

Impossible to achieve

He said that the ‘June 30’ deadline for the implementation of the loan waiver scheme was “impossible to achieve” because in most states land records being what they are, it would take much longer for a farmer to get a certificate that he owns less than one or two hectares of land.

Mr Sinha said that Mr Chidambaram was indeed a lucky man to be “reaping the benefits of what some body else had sown”. He said that during the NDA rule, interest rates had been brought down to around eight per cent from about 14 per cent earlier. This resulted in increased consumption and investment, which in turn, led on to higher growth rates.

The former Finance Minister also pointed out that the latest Economic Survey says that the “economy was not fully prepared for a different set of challenges” arising from globalisation, such as inflation and hardening of the rupee, and said, “the Government in power should have anticipated the challenges.”

Mr Sinha said that in the last four years, not one mega project has come up in the country. He said that if the UPA Government had taken up the NDA government’s idea of linking up rivers, a huge amount of economic activity would have taken place.

Populism never wins elcetion

Mr Sinha pointed out that the Janata Dal Government under the Prime Minister, Mr V.P. Singh, in the late 1980s promised both loan waivers and reservation and yet was voted out of office. “The party (“to which I had the distinction or dishonour to belong”) is nowhere in the political scene in the country,” he said, adding that “populism never wins elections.”

Earlier, Chartered Accountant and economic commentator, Mr M R Venkatesh, who belongs to the MCCI, said that the Budget assumed impracticably huge revenue inflows. For example, the assumed level of buoyancy in excise collections — about 20 per cent — would mean that the manufacturing sector would need to grow by that rate — never achieved before.

Similarly, the breaks given on personal income taxes would mean a revenue loss of between Rs 15,000 crore and Rs 20,000 crore — something that cannot be made up by better compliance, as assumed by the budget.

Mr Venkatesh said that the burden of the imminent recommendations of the 6th Pay Commission, plus the attendant hikes in salaries of banks and other PSUs, plus the loan waiver, would mean a financial burden of more than Rs 1,00,000 crore — something the Budget has no provision for.

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