Budget 2013: Achieving the impossible, three times in a row
Surjit S Bhalla : Mar 01 2013, 10:01 IST
By any yardstick, UPA-2’s performance has been the worst ever for India, and the worst among most comparable countries in the world. It takes a lot of ‘talent’ to do the following: (1) Increase the inflation rate from 5% to more than 10% in the short space of 3 years. And to keep it sustained at double-digit levels for 4 consecutive years. No other country has been able to achieve this feat. (2) Decelerate growth by a full 5 percentage points in the short space of 2 years, 2010-11 to 2012-13. No other country in the world, with the possible exception of Greece, has been able to achieve this decline. Actually, I lie—even Greece does better than UPA-2 India. GDP growth in Greece was minus 3.5% in 2010 and is estimated to be minus 6% in 2012, a decline only half that of India. (3) Considerable worsening of the current account deficit (CAD)—estimated to be close to 5% of GDP in fiscal year 2013-14, a decline of 3 percentage points since 2009. Incidentally, Greece shows an improvement of 4 percentage points in its current account deficit to a level close to minus 6% of GDP, not that far from India.
This was the background against which P Chidambaram presented the Budget for 2013-14. If you were the finance minister, wouldn’t you recognise that there was dire need for reform? Yes, I thought so too. Hence, given the extremely sorry state of affairs of the UPA-2’s Indian economy, it was expected that
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