In a veiled jibe at BJP's prime ministerial nominee Narendra Modi, who recently attributed his own arrival on the nation stage to "hard work" and not Harvard (where Chidambaram went to), the FM said: And all this is the result of hard work. I may add, among other mentors, my mother and Harvard taught me the value of hard work. He added: Neither populism nor majoritarianism nor individualism is an alternative way of governance. Our way of governance has not come in the way of lifting 140 million people out of poverty in the last 10 years. That is the greatest achievement of the UPA governments, and we are proud of the achievement.
Stressing that the UPA government's record on growth is unparalleled, the finance minister sought to back his claim with some data. Ten years ago, the country produced 213 million tonnes of grain a year and had an installed power generation capacity of 112,700 MW, but now it produces 263 million tonnes of grain and has the capacity to produce 234,600 MW of power, he said. A decade ago, the central governments expenditure on education and health was Rs 10,145 crore and Rs 7,248 crore, respectively, and now the Centre has allocated Rs 79,451 crore and Rs 36,322 crore to these sectors, respectively, he added.
However, many analysts have rejected such a comparison saying the economy was anyway expected to grow and these are necessary preconditions for inclusive growth. Fiscal deficit, the minister said, is expected to be contained at 4.6% of the GDP in FY14, even lower than the target of 4.8%, and economic growth will recover in the second half of the current fiscal to at least 5.2% from 4.6% in the first half. The current account deficit is expected to plunge to $45 billion in 2013-14 from $88 billion a year before, he added.
The Opposition, however, isn't enthused. Senior BJP leader Arun Jaitley said: The finance minister achieves this spectacular feat (fiscal deficit at 4.6% in FY14) not by bringing in revenue buoyancy or by reviving the investment cycle but by cutting down expenditure, particularly capital expenditure.
The grants for creation of capital assets and capital expenditure have been cut down by as much as R91,000 crore. This alone would have impacted the GDP to the extent of 0.8%.
He said allocations to departments and ministries relating to social sector and infrastructure have been reduced in the revised estimate from the budget estimates for FY14. Affirming that BJP-ruled states contributed immensely to the farm sector growth, Jaitley said: The FM has taken credit for the stellar performance of the agriculture sector but the real credit goes to the states like Gujarat, MP and Chhattisgarh, which have consistently given double-digit growth rates in agriculture.
Criticising Chidambaram for not tabling a statement on tax foregone, CPM leader Sitaram Yechury said in December 2012, the amount of tax not recovered stood at R4.82 lakh crore, which went up to R5.10 lakh crore by December 2013. Had this money been collected, so much of infrastructure could have been created.
Chidambaram said despite a cut in Plan expenditure, the government has provided enough funds for social sector schemes. Chidambaram also said that the government is fully committed to Aadhaar, under which 57 crore unique numbers have been issued so far. He, however, didnt give a time-frame by which the government expects to transfer all relevant subsidies through Aadhaar.
The FM said resurgence in exports, global economic revival and moderation in inflation point to better outlook for the Indian economy in FY15. The objectives were fiscal consolidation, reviving growth cycle, and enhancing manufacturing, he said, adding that manufacturing needed an immediate boost.