Get Rs 1 lakh cr from divestment — Ex-FM

A sample of some questions Chidambaram tackled:

Subhashini Jagannathan: Having initiated reforms,you find yourself and your party TMC in political oblivion. Don’t you feel there is something wrong with the political system?
Chidambaram: My party took a principled stand, steering clear of what we considered a non-secular alliance and what we considered a party tainted by corruption. We charted out a third alternative and declared our opposition to both communalism and corruption. Unfortunately — and this is something you as a voter should ponder — only ten per cent of the electorate supported our third alternative.

Ashu: Will the huge deficits lead to some crisis?
Chidambaram: The projected deficit for 1999-2000 is likely to take us back to the crisis year level of 1990-91. I’m afraid all the gains made between 1993-94 and 1997-98 would be lost.

BS Bhatia: Do you think the software boom is real and will survive?
Chidambaram: Our human resources are excellent. Hence the growth and success of our IT companies is assured. However, I am not happy with the unprecedented boom inIT stocks. If Alan Greenspan was here, he would have to find words stronger than ‘irrational exuberance’ to describe the rise in IT stocks in India.

Balaji: Why do governments highlight problems only just before a budget?
Chidambaram: It could be a ploy to prepare you for the worst and then deal you only a soft blow. However, going by the taxing record of Mr Sinha (Rs 10,000 crore of new taxes in each of his two budgets), don’t be surprised if he administers a very stiff dose of new taxes this year also.

Balaji: The government had recently appointed a committee to look into constitutional amendments? Is it required at this stage?
Chidambaram: I think the timing and the motives of the government are suspect. Further when the government packed the commission with people with biases, these suspicions were confirmed. If the government was transparent, it should have asked Parliament to appoint a review commission.

G Sodawallah: How should the Centre address the fiscal crisis in thestates?
Chidambaram: One solution is to devolve 70 per cent of the entitlement (according to the Constitution and the Finance Commission) without any conditions as at present. The remaining 30 per cent should be given only on observance of strict conditionalities and the ability of the state concerned to meet certain pre-agreed parameters or goals. The states wll indeed cry foul, but if they have to be saved from themselves, there is no other way.

Sunil Jain: If you were the Finance Minister, how would you tackle the current problems we’re facing? What would be your BIG IDEA for the budget? Thank you very much for spending so much time with us, to answer questions on the budget, as well as all manner of political questions.
Chidambaram: First, slash expenditure: use the instrument of an Expenditure Commission to take the unpopular decisions. Second, big ticket privatisation. The mood of the people is just right. They will not give any comfort to the opponents of privatisation. Raise atleast Rs 1,00,000 crore in three years and retire an equivalent amount of public debt. Three, expand the tax base without increasing tax rates. The centre cannot tax agricultural income, but there are ways in which the rural rich and other categories of people who escape the tax net can be brought within the tax net.