Under attack from the Opposition for “poor fiscal management,” Finance Minister P. Chidambaram made a strong defence of the measures taken to contain the current account deficit (CAD), fiscal deficit, depreciation of rupee and price rise.
The Finance Minister said the Government would leave no stone unturned to contain the current account deficit at $70 billion by the end of this fiscal.
“As fiscal deficit is a red line, the CAD is also a line and every endeavour will be made not to breach that line,” Chidambaram said, pitching for more foreign investments into the country.
Maintaining that the Centre was not ready to buy the theory that fiscal deficit was a “myth created by some economists”, and it would be pegged at 4.9 per cent, he said: “We must put this country on the path of fiscal consolidation and contain the fiscal deficit,” Chidambaram told the Rajya Sabha.
He said the Centre was taking all measures to stabilise the rupee. He reiterated that increased rural spending was one reason for inflation and the Government was proud of increasing the minimum support price and wages for rural employment.
Citing lack of consensus among political parties over Bills, such as insurance, Chidambaram said it would be unfair to compare reforms in India and China. In a lighter vein, he said if he were China, he would have had to handle just two persons – the general secretary of the Communist Party of China and the country’s Prime Minister.
Chidambaram said the RBI must focus also on growth and employment generation rather than just targeting price stability. “The mandate of price stability must be seen as part of the larger mandate and the larger mandate is growth and employment,” he said.
Taking a dig at the Gujarat model of development, he said he would rather prefer the Maharashtra model, which was inclusive. He claimed that 140 million people were pulled out of poverty in the last nine years of UPA rule.
Earlier, the Opposition questioned the Government’s economic management.
“In the garb of public good, UPA has promoted corruption,” BJP treasurer Piyush Goel said during the debate. He said the Finance Minister could not justify the mismanagement of the economy by putting the blame on the global slowdown.
jigeesh.am@thehindu.co.in