Chennai:
The budget failed test of financial stability as Union Finance Minister Arun Jaitley went back on his word on fiscal consolidation by failing to meet the target of 3.6 per cent fiscal deficit on the financial year 2015-16 and rather increased it by .3 per cent, according to P Chidambaram.
Speaking during Loyola Institute of Business Administration session on ‘Budget 2015-16’, the former union minister hit out at his successor for wavering from the path of financial consolidation and said that the Union budget has failed tests of financial stability as well as test of social equity and fixing inequity.
Admitting that the UPA government was behind the rising current account deficit of $88 billion due to rise in expenditure in 2009-10, 2010-11 and 2011-12, Chidambaram said that the then UPA government has worked out a fiscal consolidation plan following the recommendations of Kelkar Committee.
“My successor also accepted it. But I was shocked when Jaitley said that ‘what I should do in two years, I will do it in three years’,” said Chidambaram.
He shifted the fiscal deficit target of 3.6 per cent to 3.9 per cent, a raise of 0.3 per cent by borrowing additional 42,500 crore. Interestingly, the finance minister did not add the additional borrowing into planned expenditure. This was put in unplanned expenditure, he said.
He also said the budget planned expenditure next year is less than that of the current year while warning that it will hit the 6,000 model school programme planned in every panchayat union.
“There will be no money for this scheme. It means the 6,000 model schools programme is axed,” the former finance minister said.
He also said the budget failed the test to provide equity. It reduced the funds for scheduled caste sub plan and also for scheduled tribes. The government has also cut down on children budget by Rs 24,000 crore. “This will be reflected on innoculation programme, Balwadi and Integrated Child Development Services (ICDS),” he said.
Chidambaram also said that Rashtriya Krishi Vikas Yojana, which was started by UPA government was to increase the agriculture growth to 4.6 per cent. The allocation next year is only Rs 4,500 crore compared to previous year allocation of Rs 8,400 crore. He said 60 per cent of India is dependent on farming, it is like cutting the hand that feeds India.
He also hit out at the huge concession to corporate sector while advocating the need for fixing a four slab of tax payers. The reduction of corporate tax to 25 per cent has resulted in the Union government giving the corporates Rs 2.5 lakh crore bonanza in the next four years, he said.
He also hit out at Union Budget for increasing excise duties and service tax. These are indirect taxes and they are regressive than the direct taxes which are termed progressive, he said.
Chidambaram said the direct taxes has been reduced to 8,000 crore while the indirect taxes has been increased to Rs 23,000 crore.
To a query Chidamabaram was against cutting the defence budget. “We live in an unstable region. We have threats not only from states but also from non state actors. Given the situation, South Asia is a conflict zone. He also said the defence lack modern armament while stating that there is no way to cut defence expenditure.
The budget failed test of financial stability as Union Finance Minister Arun Jaitley went back on his word on fiscal consolidation by failing to meet the target of 3.6 per cent fiscal deficit on the financial year 2015-16 and rather increased it by .3 per cent, according to P Chidambaram.
Speaking during Loyola Institute of Business Administration session on ‘Budget 2015-16’, the former union minister hit out at his successor for wavering from the path of financial consolidation and said that the Union budget has failed tests of financial stability as well as test of social equity and fixing inequity.
Admitting that the UPA government was behind the rising current account deficit of $88 billion due to rise in expenditure in 2009-10, 2010-11 and 2011-12, Chidambaram said that the then UPA government has worked out a fiscal consolidation plan following the recommendations of Kelkar Committee.
“My successor also accepted it. But I was shocked when Jaitley said that ‘what I should do in two years, I will do it in three years’,” said Chidambaram.
He shifted the fiscal deficit target of 3.6 per cent to 3.9 per cent, a raise of 0.3 per cent by borrowing additional 42,500 crore. Interestingly, the finance minister did not add the additional borrowing into planned expenditure. This was put in unplanned expenditure, he said.
He also said the budget planned expenditure next year is less than that of the current year while warning that it will hit the 6,000 model school programme planned in every panchayat union.
“There will be no money for this scheme. It means the 6,000 model schools programme is axed,” the former finance minister said.
He also said the budget failed the test to provide equity. It reduced the funds for scheduled caste sub plan and also for scheduled tribes. The government has also cut down on children budget by Rs 24,000 crore. “This will be reflected on innoculation programme, Balwadi and Integrated Child Development Services (ICDS),” he said.
Chidambaram also said that Rashtriya Krishi Vikas Yojana, which was started by UPA government was to increase the agriculture growth to 4.6 per cent. The allocation next year is only Rs 4,500 crore compared to previous year allocation of Rs 8,400 crore. He said 60 per cent of India is dependent on farming, it is like cutting the hand that feeds India.
He also hit out at the huge concession to corporate sector while advocating the need for fixing a four slab of tax payers. The reduction of corporate tax to 25 per cent has resulted in the Union government giving the corporates Rs 2.5 lakh crore bonanza in the next four years, he said.
He also hit out at Union Budget for increasing excise duties and service tax. These are indirect taxes and they are regressive than the direct taxes which are termed progressive, he said.
Chidambaram said the direct taxes has been reduced to 8,000 crore while the indirect taxes has been increased to Rs 23,000 crore.
To a query Chidamabaram was against cutting the defence budget. “We live in an unstable region. We have threats not only from states but also from non state actors. Given the situation, South Asia is a conflict zone. He also said the defence lack modern armament while stating that there is no way to cut defence expenditure.
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