Faced with turbulent conditions that slowed growth to a 10-year low of 4.9 per cent, finance minister P Chidambaram in the last Budget of the UPA-II government unveiled his vision for the future and called for bipartisan support on 10 pending tasks that would spur the economy to a growth trajectory of 7-8 per cent.
“India’s economy, in terms of the size of its GDP, is the 11th largest in the world. There are great things in store,” Chidambaram said while tabling the Interim Budget 2014-15 in Parliament on Monday. At the top of the finance minister’s to-do list is to contain the twin deficits — while fiscal deficit should be maintained at 3 per cent of the GDP by 2016-17, the current account deficit should also be controlled through foreign capital inflows. “There is no room for any aversion to foreign investment,” Chidambaram stressed.
The finance minister also passed on the baton on controlling inflation and boosting growth and cautioned the new government to push this through to the Reserve Bank of India. “RBI must strike a balance between price stability and growth while formulating monetary policy,” he said.
He also took up the pending agenda of implementation of the report of the Financial Sector Legislative Reforms Committee, building infrastructure and boosting manufacturing growth that is estimated to shrink by 0.2 per cent this fiscal. “My intention was not to please anyone but speak plainly to the people that these are turbulent years ... and we have managed some stability. The Budget sense out a clear signal of hope to the people of India that things would be better,” Chidambaram later told reporters, adding that if these 10 tasks are done, India could be the third largest economy in the world, only behind the USA and China.
Significantly, while highlighting the UPA’s achievements in its 10 years at the Centre to refute any “policy paralysis”, the finance minister also highlighted its failures in terms of key bills on insurance, direct taxes, goods and services tax that did not get enacted.
Lambasting the Opposition for stalling the roll out of the Goods and Services Tax, he called for support from all political parties to pass the GST Bill and the Direct Taxes Code in FY15.
“I am disappointed that we have not yet been able to introduce GST. I leave it to you to answer the question, who blocked the GST when an agreement