Chidambaram: I would have liked to do several things. But we must wait for the wheel to turn
After presenting eight Union Budgets, finance minister P Chidambaram hinted that the “challenged” economy was the reason for his restraint. More decisions will be announced during the discussion and debate in Parliament, he said, adding he would then respond to the criticism that the Budget is anti-people and anti-farmer. Excerpts from an interaction:
On surprises and populism: Our economy is challenged in many ways. We have not come up with any great surprises or put any impossible burden on any section or spooked any investor. Given the restricted economic space, there is no scope for largesse or to impose any huge burden. The key factors are prudence, restraint and patience. I would have liked to do several things. But we must wait for the wheel to turn so that we have a lot more freedom to take action. People know what is good for them. I am confident this time too they will come to the conclusion that the UPA is good for them and will vote for us.
On taxing the super-rich: Such steps will not promote tax evasion. Our tax rates are comparable and competitive with other countries. Besides, the surcharge is only for one year. It adds a small cost to those making over R10 crore. I am sure they will pay it cheerfully.
On high current account deficit (CAD): High CAD is tricky. It cannot be contained by curbing expenditure or raising revenue. We have to export more and import less. But importing less is not a viable option, especially because we need more petroleum products, edible oil and pulses. Of course, gold is a product we don’t need to import as much. Import of coal and edible oil can be reduced by increasing domestic production. In the medium term, we have to increase exports. To boost exports, the finance ministry will fully support all measures taken by the commerce ministry in the Foreign Trade Policy.
On expectations from the RBI: Monetary policy and fiscal policy should go hand in hand. In fiscal policy, we have taken measures to contain the fiscal deficit. I am confident the RBI in its monetary policy will do its part so that the issues regarding growth can also be addressed.
On growth in 2013-14: Next fiscal will be better than FY13 in terms of inflation, attracting investment and