Chidambram admits that Yashwant Sinha is a better FM
The Finance Minister, P Chidambaram finds out that good management does not come out of luck. While presenting the fist of unwanted UPA’s budget, Chidambaram gloated that Yashwant Sinha was “lucky” that the rains had come on time etc. Now that the rains are on time, hardworking farmers have brought in bumper crops, the incompetent Chidambaram is not able to control either economy or the inflation. Yesterday, the WPI for the week ending June 7, 2008 was released. Predictably, grave concern has been expressed at the rate of inflation crossing 11 per cent.
Today Chidambaram released this statement “I am happy to take note of the sober and reasonable advice given by Shri Yashwant Sinha, a prominent leader of the principal opposition party. He has suggested that Government could have gone for “deeper cuts in taxes”. I have no quarrel with the proposition. After the Budget Estimates were presented to Parliament, we have cut taxes and sacrificed considerable revenue. Only recently, we gave up revenues of Rs.22,000 crore. I may point out that giving up revenues and borrowing an equivalent amount in the market in order to finance expenditure would also be inflationary. Nevertheless, I take Shri Sinha’s suggestion on board and will explore the options.”
The tax cut and revenue lost statements are a hogwash. Chiambaram had bragged “Direct tax collections at Rs.3,14,468 crore surpassed indirect taxes for the first time by about Rs.34,000 crore in the fiscal 2007-08. Higher direct tax collections have helped the government reduce fiscal deficit, meet the FRBM targets, and increase public investment in the social sectors.”
During fiscal 2007-08, net direct tax collections stood at Rs.3,14,468 crore as against net collection of Rs.2,30,184 crore during fiscal 2006-07, registering a growth of 36.6 percent. Thus, for the second consecutive year, direct tax collections have grown at over 35 percent. This is despite the fact that refund payouts during 2007-08 were more than the previous fiscal. The growth in Corporate Taxes was 32.1 percent (Rs.1,90,653 crore as against Rs.1,44,318 crore) while Personal Income Tax grew by 42.1 percent (Rs.1,14,277 crore as against Rs.80,397 crore).
Former Union Finance Minister Yashwant Sinha had criticised P. Chidambaram for having missed what he called the window of opportunity to tackle the country’s perennial problems in the Union budget 2008. He has said “How do you respond to this kind of budget? Of course, Mr. Chidambaram has been lucky. Since Independence, no one has been luckier than Mr. Chidambaram. The last four years have been favourable to him because of the reforms introduced by the NDA government through the liberalisation of the telecom, airline, insurance, FDI and infrastructure sectors. This was a window of opportunity, and he should have really tackled the perennial problems and linked it to growth.”
He said Mr. Chidambaram shifted the current liabilities to the future generation. “We have entered an unabashed and unapologetic period of competitive populism, but populism does not win elections. It is a dangerous signal that might be followed by other State Governments too.”
Criticising the Finance Minister (Chidambaram) for not making any budgetary provision for waiver of farm loan and the Sixth Pay Commission, Mr. Sinha said he was the foolish Finance Minister to clear the deficits.
P Chidambaram should know “what goes around, comes around.”
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