Accusing Finance Minister Arun Jaitley of pleasing only the corporates and income tax payers, former Finance Minister P. Chidambaram on Saturday said the budget had failed the fiscal test, the test of equity and the test of rising inequality.
“One cannot avoid the feeling that the budget leans heavily in favour of the corporate sector and the class that pays income tax. A very large section of the country, over 100 crore, does not pay income tax and is not in the corporate sector. The budget must acknowledge their concerns and attempt to deal with them, but that is missing in the budget,” Mr. Chidambaram said.
He came down heavily on the government’s move to reduce corporate tax by five per cent over four years, while making cuts in other schemes and programmes.
“The one per cent a year reduction in corporate tax is an unjustified bonanza. It will amount to Rs. 20,000 crore every year for four years and, in the fourth year, it will amount to Rs. 80,000 crore. This at a time when there are sharp cuts in outlays for many schemes and programmes,” he said.
The former Finance Minister added that the government had made “cruel and unjust cuts” against sections of the population that looked to the government for support and succour. “What is the government’s leaning. Does it lean towards the poor? The answer appears to be no. It says when growth happens you will get the benefit, but until then fend for yourself.”
There was no justification for the government to set back the target date of achieving a fiscal deficit of 3 per cent by one year, he said. He also questioned the government’s claim that it had stretched fiscal deficit from 3.6 per cent to 3.9 per cent to fund growth.
