FMs Not Used To Two Negative Things In One Budget: Debroy

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Mumbai, February 27:: Finance ministers are traditionally not interested in handling two negative factors in a single Budget. So, if the finance minister is putting his hands on subsidies in the Thursday’s Budget, he might not be in a position to resort to cut small savings rates, Rajiv Gandhi Institute for Contemporary Studies director Dr Bibek Debroy said on Tuesday.

Though there was an agreement on the reform agenda for the last ten years, the only missing thing had been the “will and direction” to implement them, Mr Debroy said at a talk on Budget-2002 organised by Standard Chartered Bank.

The demand of the corporates to bring their tax structure on a par with that of individuals, it is unlikely to materialise in the present scenario where the government is not able to meet its budgeted tax collections, Mr Debroy said.

The same would be the case with the expectations that the excise duties would be cut. “Even a move to claim that the three slabs have been brought down to one at 16 per cent may attract flak being indiscriminatory and against the interests of the disadvantaged sectors. It may make the finance minister not to make such a move,” Mr Debroy said.

Fiscal deficit target is unlikely to be achieved this fiscal and it is likely to remain at 5.1 per cent of the GDP estimates for the current fiscal. Dwelling in detail about the issue of freedom the finance minister would have on the government finances, Mr Debroy said that 92 per cent of the Budget expenditure is out of his control, making the fiscal deficit base more on revenues. Rs 100,000 crore falls under non-plan expenditure, public debt and defence budget are Rs 150,000 crore and Rs 65,000 crore respectively, while the pensions to government staff are at Rs 15,000 crore. Confederation of Indian Industry director Dr Onkar Goswami cut the claims of the government that India had been posting the one of the highest GDP growth rates in ther world, into shreds.

He compared India’s GDP growth with Thailand, which has suffered a blow due to south Asian crisis since 1997 and not posted much of growth rates from then on, and said that the country’s GDP growth rate was founded on a low base.