Special Correspondent

“The Finance Minister has shifted current liabilities to future generation”

The budget has no provision for waiver of farm loan and the Sixth Pay Commission

If voted to power, BJP will abolish Fringe Benefit Tax and Banking Transactions Tax

CHENNAI: Former Union Finance Minister Yashwant Sinha on Monday criticised his successor P. Chidambaram for having missed what he called the window of opportunity to tackle the country’s perennial problems in the Union budget.

In his presidential address at a workshop on ‘Central Budget and the Finance Bill 2008,’ organised by the Madras Chamber of Commerce and Industry (MCCI), he said: “How do you respond to this kind of budget? Of course, Mr. Chidambaram has been lucky. Since Independence, no one has been luckier than Mr. Chidambaram. The last four years have been favourable to him because of the reforms introduced by the NDA government through the liberalisation of the telecom, airline, insurance, FDI and infrastructure sectors. This was a window of opportunity, and he should have really tackled the perennial problems and linked it to growth.”


He said Mr. Chidambaram shifted the current liabilities to the future generation. “We have entered an unabashed and unapologetic period of competitive populism, but populism does not win elections. It is a dangerous signal that might be followed by other State Governments too.”

Criticising the Finance Minister for not making any budgetary provision for waiver of farm loan and the Sixth Pay Commission, Mr. Sinha said he was the foolish Finance Minister to clear the deficits.

“I have suffered the impact of the Fifth Pay Commission. The impact of it on fiscal deficit is big, and it would fall on my government! Please account for it. Even the Railway Minister has made a provision for it, then how can he completely avoid it in his budget,” he asked.

Early polls

Hinting that the government was preparing for September polls, he said that if voted to power, the BJP would abolish Fringe Benefit Tax and Banking Transactions Tax and write off private loans of farmers. “I administered the interest rate and gave a fillip to the housing activity. In the past four years, infrastructure has remained a weakness for this government, and has not seen a single mega project. We have gone back to the bad old days of higher inflation and higher interest rates,” he said.

Investment pressure

Under the present circumstances, the country was bound to come under investment pressure, and exports would suffer as seen in the textiles and information technology sectors. “Today we see deceleration in industrial growth. If the manufacturing sector slackens further, it will be difficult to maintain the kind of growth seen in the last five years,” he warned.