Even as United Progressive Alliance coalition partners — the Trinamool Congress and the DMK — pitched for rolling back the oil price hike in view of its inflationary potential, Finance Minister Pranab Mukherjee on Sunday expressed the government’s firm resolve to see the budget proposals through in Parliament. He said he was confident of working out an amicable solution with the allies.
“When we propose something, we do that for implementation, not for rollback. There was a basic approach to the budget which I tried to introduce through various proposals,” Mr. Mukherjee said during a post-budget interaction at his North Block office here.
To a pointed question on the divergence of views among the UPA’s partners on the issue and the lack of numbers for the Congress in the Lok Sabha, Mr. Mukherjee told The Hindu: “If [the] budget proposal doesn’t get passed, then the government will collapse. So I am not looking at that. We are dealing with it… DMK is the partner for six years. There have been occasions when divergence of views has been there. So, it is possible that in a coalition government, there will be divergent views. But there is mechanism with which we deal with it. So I am not worried about that and I am not rolling back that [price hike of petroleum products] proposal.”
Detailing why and how the additional revenue to be mopped up through his tax proposals — most of which are a rollback of the stimulus measures extended at the time of the slowdown — was necessary for the basic approach to the budget, Mr. Mukherjee said that at the time of its formulation the situation was difficult in more than one sense. “This year, third part of the year [October-December 2009] was extremely difficult. Everything appeared to be uncertain. Everyone was sceptical. Even the world leaders did not believe that there was any possibility of an economic turnaround.”
Robust GDP growth
What provided confidence, the Finance Minister said, was the robust GDP growth of 7.9 per cent in the second quarter. “Before the end of the financial year [2008-09], we found there’s a possibility of a strong recovery. It began from the first quarter at 6.1 per cent [current fiscal]... though the third quarter figure is less at 6 per cent, please note that this is despite agriculture contribution of minus 2 per cent… That means service sector and manufacturing have considerably covered up the deficit negative contribution of agriculture.”