Budget Does Not Have Any Structural Reforms, Says P Chidambaram

Senior Congress leader and former finance minister P Chidambaram said today that the Union Budget for 2019-20 is "status-quoist" as it seeks to bring about only incremental reforms and not radical reforms required by the country to grow faster.

Delivering a lecture on the "Union Budget - Will it deliver what it promises", he said there is nothing in the budget to take care of the 20 per cent of the poorest of the poor.

"This is a status-quoist budget of a government which talks to reform, but the idea of their reform is incremental reform, just bring changes on the margins. This is not the kind of structural reforms and radical reforms that this country needs. What we need are radical reforms and the best example of a radical reformer is Dr Manmohan Singh," he said.

He said the budget does not have any structural reforms, and if there are no structural reforms, it appears that they want to carry on with the existing policies and reforms and yet achieve that kind of growth that this government envisages.

Mr Chidambaram said Manmohan Singh brought radical reforms, "when we tore up the red book, when we abolished licencing overnight and when we got rid of foreign exchange control and that despicable era. Those were radical reforms. I can't see any radical reforms in this budget. Thus, our country, our economy will remain status quo for one more year," he said.

"Except the corporate tax, every other other number in this budget is suspect... Every number is not credible," he alleged, asking where the government proposes to bring in the revenues from.

The former finance minister also said that the amount of Rs 70,000 crore is "totally insufficient" for recapitalisation of banks. On the tall promise of making India a USD five-trillion economy by 2024, he said, "We will become a five-trillion-dollar economy by 2024 and they would achieve this promise made. But I can also make happen my promise of turning India into a 10-trillion-dollar economy in the next five years of 2024."

He said a close study of the budget indicates that in terms of major investment and growth promoting activities, there is only 300 km metro line addition, 10,000 km FAME and accelerated water transport movement of cargo along the Ganga river.

He said the budget proposals have nothing to boost investment and when growth is not coming through dramatically higher investment, it can only come from higher efficiency. "Given that, this level of investment is not going to give a dramatic rise in the growth rate," he noted.

The senior Congress leader said: "We are selling false narratives that the inflation and consumer price index are low, but only to some extent and for some people only".

"When we do radical reforms, we can see rapid growth," he said, adding the country needs to grow rapidly to ensure that there is enough investment to improve the state of education and health facilities in the country.

To a question on the sale of public sector undertakings by the government, he said his personal view is that the government has the right to do business only where there is a need to do so. "All PSUs should be privatised and I have no reason to say why the government should own or run PSUs. But there is a difference between corporatisation and privatisation and there is nothing wrong in corporatisation," he said, asserting that this is his personal view.

Mr Chidambaram said the rise in customs duty is intended to protect the domestic industry, "but what will happen is that you will promote inefficiency and this is "clearly a protectionist pre-1991 policy this government is adopting, which is wrong".