New Delhi: Former Union Finance Minister P. Chidambaram on Thursday dubbed the 2017-18 Budget a “damp squib” but praised his successor Arun Jaitley for adopting a “tone of moderation” after the November 8 demonetisation.
Calling the annual financial exercise a wasted opportunity, Chidambaram said: “Altogether, I am disappointed the government has not used the opportunity to push through bold reforms, revive aggregate demand and growth, and devise new strategies for job creation.
“Our conclusion, on reading all the Budget documents, is that the exercise has turned out to be a damp squib. But, there are a few positives, which we are happy with. The most important positive is that the government seems chastened after the debacle of demonetisation and has not done anything reckless or disruptive.”
Praising Jaitley, the senior Congress leader said: “I compliment the Finance Minister on adopting a tone of moderation. It is obvious that demonetisation and its inevitable consequences have demoralised the government.
“They have retreated from reforms and have no answers to the severe challenges faced by the economy. The sections of people most affected by demonetisation are the farmers, farm workers, labourers, self-employed, artisans and micro, small and medium businesspersons.
“They lost crores of rupees in form of wages, incomes and capital. There is absolutely nothing in the Budget for these sections. We had demanded that the government offer them compensation in some form, but the government has cruelly neglected them.”
Asked to elaborate on the points for complimenting the government, Chidambaram said there are several things which he thought are good about the Budget.
“He has expanded the mandatory non-cash transactions and now said any transaction above Rs 3 lakh can only be in non-cash mode. He has attempted to clamp down on political funding by saying that cash donations or anonymous donations cannot exceed Rs 2,000,” said Chidambaram.
The Congress leader also pointed out that the Fasal Bima Yojana will now cover 40 per cent of the cropped area in 2017-18 and 50 per cent in 2018-19 which, he thought, was a good move.
“We need to ensure crops do not fail and ensure that productivity increases. I compliment him on setting a target of one crore houses by 2019. How he will achieve the target is the question. I compliment him on the additional capital expenditure, which will be little over 25 per cent mainly in railways and roads,” said Chidambaram.
He said the government had discarded fiscal prudence and violated the Fiscal Responsibility and Budget Management Act.
“In 2015-16, the fiscal deficit target should have been 3.6 per cent; instead it was kept at 3.9 per cent and the Controller General of Accounts/Comptroller and Auditor General have reported that it was actually 4.31 per cent.
“Now again, the target for 2017-18 should have been kept at 3 per cent, but it is 3.2 per cent. Analysts, bankers and investors in India and abroad will not take kindly to this disregard of fiscal responsibility,” he said.
Chidambaram also accused the government of being oblivious to the plight of the farming community. “The minister has not even uttered ‘Minimum Support Price’ in his speech. The farming community has been totally cheated,” he said.
“The National Democratic Alliance promised to create two crore jobs every year. Their best result so far is 1.5 lakh jobs in 2015-16. There is absolutely nothing in this Budget that points to a change in strategy to create new jobs.
“There is nothing that points to steps to revive flagging growth,” Chidambaram added.
He also rooted for early introduction of Direct Tax Code, saying: “It is imperative that the draft code be updated and enacted.”