Former finance minister P Chidambaram attacked the government on the Budget, listing three “jumlas” — minimum support price for foodgrains, promised jobs and a new healthcare insurance scheme — and posing 12 questions to Finance Minister Arun Jaitley in Rajya Sabha.
“Before you assumed office, you promised 2 crore jobs a year… What is your definition of a job?” he said in one question. He asked if the government plans to recommend to the International Labour Organization that frying pakodas is also a job.
“Budget 2018-19 has made the fiscal deficit worse to 3.5% against 3.2% in 2017-18 and 3.3% against 3% in 2018-19. What are the estimates of the Current Account Deficit for 2017-18 and 2018-19?” went one of his questions. He quoted extensively from the Economic Survey and identified education, employment and agriculture as three major challenges for chief economic adviser Arvind Subramanian. “He [Subramanaian] is a good doctor but what do you do when the patient is very ill?” Chidambaram said.
“Every deficit has breached the target… Will the impact of these high deficits be inflationary? Currently, wholesale price index is 3.6% and consumer price index is 5.2%. What are the estimates of average WPI and average CPI for 2017-18 and 2018-19?” Another questoon was: “The yield on 10-year treasury bond on 31 January 2018 was 7.43% and it stood yesterday at 7.57%. Is this a signal that interest rates will rise across all debt instruments? Will the rise in interest rates be inflationary?”
Chidambaram asked if the price of crude oil rises to $70 or $75 per barrel, how it will impact the government budget estimates, especially deficits. “Will you raise the retail prices of petrol and diesel or will you cut the central excise duties on petrol and diesel?”
He said the government will borrow an additional Rs 48,000 crore in 2017-18, and Rs 37,000 crore was borrowed by ONGC. “But where did this Rs 85,000 crore go?” he said. “The total expenditure in 2017-18 increased by Rs 71,000 crore, but revenue expenditure increased by Rs 1,07,371 crore and is this not evidence of a spendthrift government that has abandoned all norms of fiscal prudence?”
Chidambaram cited projections for GDP at 6.5%, and estimates for 70 lakh new jobs in 2017-18. “In 2014, when the GDP was at 7.5%, there were 23 lakh jobs, as per EPFO records… But this is the only country in the world where while the GDP is declining, the jobs are increasing,” he said.
He noted the gap between budget and revised estimates for capital expenditure in 2017-18 was Rs 36,000 crore. “Which are the schemes and projects that took a hit?” he said. For the gap in customs (Rs 2,45,000 crore BE, Rs 1,35,242 crore RE), he said: “Is there a story there that you have not yet told the country and the people?”
About projections, he said: “For 2018-19, you have projected the following growth rates: corporation tax 10.15%; income tax 19.88%; GST a whopping 67.31%. Is there a philosophy of taxation that you wish to share with the people of India?”
He said no provision has been made for promised insurance for 10 crore families up to Rs 5 lakh. “Even if we calculate 1% as premium contribution, an estimated fund of Rs 50,000 crore will be needed. At 2%, this amount will be Rs 1,00,000 crore while at 3%, this will come to Rs 1,50,000 crore,” Chidambaram said. “Where have you made a provision for this in the Budget?”