Jaitley blames PC over deficit

Finance Minister Arun Jaitley has blamed the UPA regime and his predecessor P Chidambaram for delaying the fiscal consolidation roadmap.

Replying to the debate in the Rajya Sabha on the Appropriations Bill, 2015-16, the finance minister said he had no other option as he had to pay the unpaid bills of the UPA regime on account of subsidies, tax refunds, and compensation to states.

The government believes in the quality of fiscal deficit and, therefore, we decided to delay the fiscal consolidation roadmap, Jaitley said.

“What is the relevance of showing a lower fiscal deficit number when the hidden fiscal deficit is more?” Jaitley asked in a veiled attack on former finance minister P Chidambaram, alluding that he had made provisions for tax refunds, subsidies, and compensation to states but did not pay them in order to maintain a 4.1 per cent fiscal deficit in 2013-14. He rubbished criticism that Budget 2015-16 has done injustice to states by reducing central share of funds to them. 

“Not a single state is going to get less. Not a single state has come forward to say we were better off with the 13th Finance Commission,” he said. The Appropriations Bill, 2015-16, was later approved by a voice vote, marking completion of the first phase of the budgetary exercise.

The Budget was criticised in both Houses of Parliament for being pro-corporate, anti-poor, and for reducing allocation to states. India’s economic growth rate cannot be 4-5 per cent where you can barely pay salary and undertake essential expenditure, he said. Rejecting suggestions by some opposition parties for hiking corporate tax, Jaitley questioned which investor would come to India if the tax rates are the highest in the world.

He once again pleaded to the Opposition not to obstruct or delay the reform process. “We need larger consensus on the growth roadmap. Obstructionism can have a sadistic thrill, but that can only be temporary,” he said.