Government budget on capital spends less than 1% of GDP: P Chidambaram

Listing problems with the Narendra Modi government, P Chidambaram said it refuses to admits in mistakes, lives in denial and has predispositions

The opposition has dug deep on the budget numbers and the findings may be disturbing at a time when the government is planning an infrastructure-powered economic growth.

The numbers, according to former Finance Minister P Chidambaram suggest that the money left with the government for capital expenditure in 2020-21 is less than 1% of the total Gross Domestic Product (GDP) as against its spending of 1.4% of the GDP this year.

Initiating the debate on the union budget for 2020-21 in Rajya Sabha, Chidambaram said the government had run out of money and was “masking” its situation by numbers that were neither easily acceptable or believable.

He said the government's revenue deficit was estimated to grow 2.8 per cent next year even as it had promised to contain the fiscal deficit at 3.5 per cent, which leaves only 0.7 per cent of the GDP to be spent on the capital side.

The difference between the fiscal deficit and revenue deficit is what remains with the government for capital expenditure in a year. A small part of borrowings by the government is also added to that.

Reeling out other macro-economic numbers, Chidambaram said while GDP had fallen to an 11-year low of 4.5 per cent in the July-September quarter, agriculture had grown only 2 per cent, while consumer price inflation had risen from 1.9 per cent in January 2019 to 7.4 per cent in a matter of 11 months.

Also, food inflation was at 12.2 per cent. Bank credit was growing at 8 per cent per cent with non-food credit rising by 7-8% and credit to the industry by just 2.7 per cent.

Credit to agriculture had declined from 18.3 per cent to 5.3 per cent and that for MSMEs from 6.7% to 1.6 per cent, he said.

"Who are your doctors?, I want to know," he said, adding the government considers Congress as an untouchable and does not think of any good about the rest of the Opposition and so doesn't consult them.

“Modi government's chief economic adviser for four years, Arvind Subramanian, has stated that the economy is in the ICU (Intensive Care Unit). But I would say the patient has been kept out of the ICU and incompetent doctors are looking at the patient," Chidambaram said.

"It is dangerous to have a patient out of the ICU and being looked upon by incompetent doctors. What is the point standing around and chanting the slogan 'Sab ka Saath, Sab ka Vishwas'," he said.