The House is bound to witness fireworks when two finance ministers, one present and another former, speak in Parliament on the state of the economy. On Thursday, former finance minister P Chidambaram accused the Narendra Modi government of “abandoning fiscal prudence” and worsening the fiscal deficit, while his successor Arun Jaitley said it was no mean feat that India earned a Moody’s upgrade only after 14 years.
However, Jaitley acknowledged that there was a revenue deficit. “We are trying to narrow the gap. These will be worked out in a couple of days,” the finance minister said in Lok Sabha. While presenting the Union Budget last week, Jaitley had revised fiscal deficit target for 2018-19 to 3.3 per cent of the GDP against the earlier target of 3 per cent.
Citing International Monetary Fund data, Jaitley said India would become fastest growing major economy in the world in two years. Lashing out at the Congress, he asserted, “During the UPA regime, nobody spoke about the economy being a bright spot in the global economy. Nobody said India is a fastest growing economy then, it only happened now.”
Retorting to the Congress’ demand of a single 18 per cent GST slab, the finance minister said very few countries had the same tax slab on eating out at restaurants and buying a luxury car. “Capping of GST at 18 per cent is unviable. Few countries have the same GST for eating out and on a luxury car. Can the same be applied in a country like India that has a huge number of families below the poverty line,” Jaitley asked. The finance minister said demonetisation was a difficult decision but said its impact on the economy was minimal. “Before demonetisation, India’s GDP growth was 7.1 per cent. This year we are expected to grow at 6.7 per cent. The difference is 0.4 per cent. That too because of the impact of the GST,” Jaitley said.
On Aadhar, Jaitley claimed that it was the BJP government that brought in a full chapter on privacy in the Aadhaar law. The UPA version was silent on what purpose it would be used for and on the privacy issue, he said. “You (Congress) brought in Aadhaar without the support of law. The law could not be passed. The law was silent on what purpose it would be used for and all the privacy requirements. We looked into the law and put in a full chapter on privacy. The ones who brought it in has disowned it and challenged it in the court,” Jaitley said.
On the contentious Rafale deal, which has become cannon fodder for the opposition to hit out at the BJP, Jaitley said the breakup cost of the deal cannot be disclosed as it would reveal to the enemy what weapons system is part of the aircraft. Saying that security pacts are “inherent” to such deals, Jaitley asked Congress MP Veerapa Moily: “Ask your kabadi (scrap dealer) president to kindly go back to Pranab Mukherjee (who served as defence minister in UPA) and take lessons from him.”
The remarks led to a ruckus in the Lok Sabha as Congress members rushed to the Well to protest, forcing Speaker Sumitra Mahajan to adjourn the House.
Earlier in the day, initiating the debate on the 2018-19 budget in the Rajya Sabha, Chidambaram assailed the Modi government over job creation and pointed out that while the total expenditure in 2017-18 increased by Rs 71,000 crore, the revenue expenditure increased by Rs 1,07,371 crore. “Before you assumed office, you promised two crore jobs a year. The International Labour Organisation describes a proper job as employment that is certain, regular and reasonably secure. How many ILO-described jobs were created in the four years of your government?” said Chidambaram.
Taking a dig, the former finance minister also asked whether the government will suggest the ILO to include those selling pakodas in its definition of employment. The comment led to hooting from the treasury benches even as an unfazed Chidambaram continued to target the government and sought replies to 12 questions related to the economy.