Budget 2019

Chidambaram slams budget, says Centre set unrealistic targets

Our Bureau New Delhi | Updated on July 11, 2019 Published on July 11, 2019

Former Union Minister P Chidambaram

The BJP and the Congress took turns to blame each other for the “crisis” in country’s economy during a debate on the budget in Rajya Sabha on Thursday. The Congress said the budget has failed to address issues such as unemployment and farm distress, the BJP retorted by saying that most of the issues were “inherited” from the previous UPA regime and the Narendra Modi government is focussed at helping the poor in the country.

Former finance minister P Chidambaram ripped apart the first budget of Nirmala Sitharaman and said the budget does not chalk out a clear roadmap to take the country on the path of high economic growth and lacks bold steps and structural reforms. He said there was no further relief to the middle class than what the Interim Budget gave. “If household savings don't improve, domestic savings will not rise. If domestic savings do not rise, domestic investment will not rise. If domestic investment does not rise, the Gross Fixed Capital Formation will remain at about 29.5 or 30. If it remains at 29.5 or 30, how will you get 8 per cent growth? Please teach me,” Chidambaram said.

He said as against Budget Estimates for 2018-19, the revenue loss was ₹ 1,60,000 crore. He said against the revenue estimate of ₹ 22,42,833 crores, the actual collection ₹ 19,67,187 crores. He said the Centre actually collected ₹ 13,16,951 crores, a decrease of ₹ 1,60,000 cores when compared with the revised estimates. “Last year, income tax collections increased by 7.1 per cent. For the new year, the Finance Minister is projecting that income tax collections would rise by 23.25 per cent. If you achieve that, you would rank with the Olympian pole vaulter! From 7.1 per cent you would rise to 23.25 per cent! Customs was negative by 8.6 per cent; projection is plus 32 per cent. Excise was flat, negative by a half per cent; projection is 15.55 per cent,” he said.

He said the GST increased by 3.38 per cent, while the projection is 45 per cent. “Now, if you achieve these targets, I would compliment you at the end of the year. But I am afraid, these targets are completely unrealistic,” he added. Chidambaram said Sitharaman no longer can blame the UPA for a “wobbly economy” as she inherited from the previous government headed by Modi himself. “After five years of NDA-I, in the last year, in 2018-19, growth was 8.0, 7.0, 6.6 and 5.8. In the last year, the economy was in a decline. That is point one to note. Farm sector grew at 2.9 per cent only, the lowest in those five years. If you look at the farm sector graph, it is a decline. Over 10,000 farmers commit suicide every year,” he said. He added that IIP for manufacturing in the last four years of NDA Government was barely 2.8, 4.4, 4.6 and 3.5; nowhere near the double-digit growth that is required.

“The workforce shrunk by 4.7 crore people. Capital expenditure was only 1.7 per cent of GDP, and what she has projected for the new year is only 1.6 per cent of GDP. The gravity of unemployment can be looked at by only one example. For 62,907 khalasi posts, 82 lakh people applied out of which 4,19,137 were B.Tech. graduates and 40,751 had a Masters in Engineering,” he said.

Senior BJP MP Prabhat Jha countered Chidambaram and said the BJP has made all efforts to undo the mistakes did by the previous governments. Jha said that was the reason why farmers reposed their faith on Narendra Modi for the second time. “They rejected your promise of ₹ 72000 per year and opted for our promise of ₹ 6000 a year, he said.

Published on July 11, 2019
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