Sinha joins issue with Manmohan Singh

"It’s his dharma to criticise the budget,” he told Home TV in an interview to be telecast on Monday evening.

United States is yet to define the `depth and spread’ of the sanctions, he said, adding that other countries and the World Bank had deferred loans but “Nobody has said that projects which have already been approved will also be starved of funds.”

“This position has to be understood very clearly. "Now anything which is being deferred at this point in time will impact on the budget in something like 12 to 18 months’ time,” he said. “How do I factor that (in) today,” hesought to know.

“If sanctions are defined and imposed, we will stand up and take the country into confidence. But I can’t dream about sanctions, I can’t imagine and then factor that in,” he said.

“They (critics of the budget) don’t understand the implications of the sanctions. He (Singh) is anticipating too many things at this point in time. I feel there is no need to create panic on account of sanctions,” Sinha said.

The finance minister maintained that the sanctions would not have any significant impact on the country’s economic development nor would it have any significant impact in the current financial year.

“The Glenn Amendment says American banks shall not lend to the government of the country on which sanctions have been imposed. "The Indian government, however, is not in the market to borrow money from American banks,” he said.

Referring to his decison to disinvest 74 per cent of government equity in non-strategic public sector undertakings, Sinha said he did not agree with Singh thatit was not a serious intention on the part of the government to privatise state-run units.

On the contrary, he said, neither Singh nor former finance minister P Chidambaram had shown the courage to take this step. “Why didn’t he (Singh) do it in his budget? Or why didn’t Chidambaram do it in his budget? If it was only a question of saying it, even saying calls for courage. They didn’t show that courage,” he said.

The finance minister said he could not set a timetable for disinvestment as it depended on how the market behaved. “There is no need for me to define a starting date. It is absolutely wrong to think that I should have defined a date because we already have four companies in the pipeline,” Sinha said referring to the announcement in the budget to disinvest shares of four state-run units: Indian Oil Corporation, Gail, Concor and MTNL.

To the criticism that his seriousness in proposing disinvestment would have been established had he acted upon the unanimous recommendations of the stock marketto revive activity in exchanges, Sinha said, “Budgets are not made with the stock market in mind. No finance minister worth his salt will make a budget for the stock market.”

He did not agree with the view that budget did not pay much attention to boosting exports. “I have given up a revenue of Rs 3,500 crore in trying to give that export-import policy concession to the exporter.”

Sinha claimed it was the first budget of the reform era which had gone out of the way to recognise the rural segment’s contribution to the country’s economy. He said it was only the foreign institutional investors and foreign investors, with no interest in rural India, who thought the budget lacked focus and vision.

“If they think that only a few metropolitan cities matter in this country, if they think that a handful of interests that they represent matter in this country, then I am sorry, this is not true,” he said. “Sixty to 70 per cent of our people live in rural areas, and they must be cared for and it is goodeconomic sense. "It’s not obscurantism of any kind.”

On the opening up of the insurance sector, Sinha said he would bring in legislation in the winter session of parliament. “Then we will have the Insurance Regulatory Authority in the picture,” he said.

“It will be the job of the IRA to call for applications from the private sector and see what happens. "The Insurance Regulatory Authority will determine what kind of companies will do business in the insurance sector,” Sinha said.