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While stating that Aadhaar cash transfers will have to be thought through completely in the light of the problems faced in implementing LPG cash transfers, finance minister P Chidambaram said that, given a choice, people will choose a job over subsidies. The finance minister’s statement, in an interview to the Express Group, assumes significance in the context of the elections being pitched as a jobs-versus-dole one.
Chidambaram, however, said that pitching the elections in that manner was an oversimplification since the issues in each state were different. UPA-I’s success was, he said, “in part, due to the welfare measures that we took. But in large part, it was due to the growth that we created and the economic opportunities we created, including jobs.”
On the important question of inflation-targeting, the finance minister reiterated that he didn’t agree with the argument that Reserve Bank of India (RBI) had to target only inflation but, to the extent price stability was one of the RBI’s goals, along with growth, the inflation target would be set by Parliament.
Until Parliament started behaving responsibly, he said, the next government — whoever formed it — would have the same problems UPA-II had in getting critical Bills like those on the goods and services tax and the Direct Taxes Code through. “That is why the BJP does not speak about these issues. The BJP’s prime ministerial candidate does not meet the media. On any issue, on coal nationalisation Act, have they taken a stand? If you don’t revisit that Act, the same problems that we face will be there for the next government as well... We are talking about it, the NDA doesn’t talk about it, the BJP doesn’t talk about it,” he said.
Much of the paralysis in governance, he said, “is attributable to the fact that Parliament is paralysed. More than the executive, it was Parliament that was paralysed by mindless opposition and obstruction.”
Chidambaram rejected the view that the banking sector was facing a crisis on non-performing assets — a large part of the problem, he said, would get fixed once growth returned. On the question of experts saying banks needed R2-4 lakh crore of funds over the next three years, he said the numbers were off the mark but ways were being found to ensure banks were fully funded. The UPA’s policy, he said, was of keeping government equity at 51%, while the BJP had toyed and then abandoned the idea of going down to 33%.
“It is not whether I or you think it is a good idea. An idea is good only if it is politically feasible,” he said.
His biggest regret, he said, was not being able to pull back on monetary expansion a year earlier. “What we have done beginning August 2012, I wish we had done it in August 2011… We would have given ourselves two years and 6 months to pull back the economy to the high growth path,” he said.