Chidambaram praises fiscal consolidation, but denounces budget 2016

| Monday, February 29, 2016 - 20:39
First Published |
P. Chidambaram

New Delhi:  Former finance minister P. Chidambaram on Monday said the Narendra Modi government’s “political” budget was not farmer friendly because it did not talk about crucial agriculture pricing.
“The crucial point in agriculture is the price. Last year, I think farmers were cheated. In many cases, there was a very poor increase in MSP (Minimum Support Price). In some cases, there was zero increase in MSP,” Chidambaram told reporters here.
“Immediately, it is the price signal that will enthuse farmers. Farmers are not getting fair and remunerative prices,” the senior Congress leader said.
(Also Read: Manmohan Singh is sceptic about Modi's "doubled income" promise to farmers
Chidambaram denied that the budget by any means was pro-poor.
“Pro-poor and all are catch-all phrases. I want to know who is happy. Tax payers? Market? The middle class? I don’t think so.”
He criticised Finance Minister Arun Jaitley for “no new idea” in the government’s budget and alleged that the government has been dragging its feet on the crucial but stalled “Goods and Services Tax” (GST) legislation.
“GST has only been delayed because the government is unwilling to step away from its stubborn position,” Chidambaram said.
Asked if he saw the budget political in its essence, the Congress leader said the government passed two “forgettable budgets earlier".
“Clearly the (new) budget was expected to be political and I am not surprised.”
"There is no big idea in the budget. One virtue of the budget is that it has left every section of people equally disappointed. This budget is a wasted opportunity," Chidambaram told the media here.
"I am happy that the government has spurned the advise of Chief Economic Adviser Arvind Subramanian and went in for fiscal consolidation. I take this as a vindication of the (earlier) United Progressive Alliance government's policy on fiscal consolidation," the Congress leader added.
He said 'reform' was a misunderstood word for the government. 
"Prime Minister (Narendra Modi) had promised to reform to transform. The word 'reform' is a little understood but much-used word. Reform means reform of factor markets or product markets. There is little evidence of such reforms in the budget. The National Democratic Alliance has followed its own brand of budget-making, which is just housekeeping and accounting," said Chidambaram.
Chidambaram also said that the government has wisely refrained from predicting the growth rate for 2016-17.
On the issue of tax collection, he said: "The government is boasting that they collected more tax than ever. It was not from corporate or income tax but due to excise duties on petrol and diesel."
"There is lukewarm reference to the Goods and Sales Tax Bill but there is no promise of accommodating the legitimate criticism by the opposition. I am happy that the UPA schemes have been continued but the crucial problem is price. There is no major initiative in increasing productivity of crucial crops," the Congress leader said.

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