Senior Bharatiya Janata Party (BJP) leader Yashwant Sinha – in a retort to criticism by Finance Minister P Chidambaram that the BJP veteran had the poorest record as the finance minister in the post-liberalisation India – said he might have been the country's worst finance minister since 1991 but did not commit any fraud.
In the latest edition of the Sinha-Chidambaram war of words, Sinha said Chidambaram had achieved the fiscal target of 4.6 per cent of the GDP in 2013-14 through "fraud".
Sinha said, "I may have been the worst finance minister after 1991, but I did not commit fraud. Chidambaram has been the cleverest finance minister since 1991 and has played fraud on the Budget not only this year but always". Sinha had described Chidambaram as the worst finance minister at a BJP press conference early last month.
Sinha, the finance minister from 1998 to 2002 in the National Democratic Alliance (NDA) government, cited a newspaper analysis to point out Chidambaram had achieved his fiscal deficit target by "savagely" slashing the Plan or productive expenditure of the government. He claimed the incumbent finance minister "also milked the cash-rich PSUs, and forced tax payers to pay more advance tax in the financial year 2013-14 which will have to be refunded this year". Sinha said, according to media reports, "Chidambaram has also transferred a subsidy bill of at least Rs 60,000 crore more to the upstream oil companies such as ONGC, Oil India and GAIL."
Sinha, who just like Chidambaram, has sat out the current Lok Sabha elections, claimed the finance minister was "also wrong about the quarter to quarter payment of subsidies. According to again media reports, a subsidy expenditure of Rs 40,000 crore has been postponed to the next year in addition to the payment due for the fourth quarter."
"If I am wrong," Sinha said, "let Chidambaram come out with the total subsidy expenditure figures for the last year and the actuals which have been paid up to 31 March, 2014." Chidambaram was the finance minister in the 1996-98 United Front government and Sinha succeeded him as finance minister in the subsequent NDA government.
Sinha said he wasn't the only person questioning Chidambaram. He cited newspaper analysis published Wednesday which referred to the fact that in his 1997-98 budget Chidambaram had targeted a fiscal deficit of 4.5% of GDP. Sinha said when he presented the budget for 1998-99, the deficit had ballooned to 5.8%. The BJP leader quoted from the newspaper analysis: "Likewise, it seems the real story of the actual fiscal deficit for 2013-14 would be revealed when the next finance minister presents his budget for 2014-15".
On Wednesday, Chidambaram said that Indian economy suffered its worst years in terms of growth since liberalisation in 2001-02 and 2002-03, that is during Sinha's tenure as finance minister and Prime Minister Vajpayee was forced to replace him. Chidambaram's onslaught on Sinha came after the latter had told a newspaper on Wednesday that the current finance minister was "trying to fool the country by saying the fiscal deficit has come down to 4.6%".
In the statement issued today, Sinha said: "I may have been the worst finance minister after 1991, but I did not commit fraud. Chidambaram has been the cleverest finance minister since 1991 and has played fraud on the budget not only this year but always". Sinha had described Chidambaram as the worst finance minister at a BJP press conference early last month.
Sinha further claimed that the seeds of present crisis by Chidamabram in 2008-09 and that "liberties" taken then with the fiscal were still "bothering us". Sinha maintained that Chidambaram played fraud in the interim budget and that the next government should come out with a white paper to expose his lies. Further quoting from the newspaper analysis, Sinha said the expenditure figures released by the Comptroller General of Accounts (CGA) of the Ministry of Finance for April - February 2013-14 were "telling". He said the figures not only showed, as the newspaper has pointed out, "that in actual numbers the fiscal deficit has exceeded Chidambaram's revised estimates presented in February 2014 by a whopping Rs 74,760 crore, from Rs 524,539 crore to Rs 599,299 crore."
"In%age terms the fiscal deficit up to February 2014 was 114.3% of the revised estimates for the whole year. Similarly, the revenue deficit was 117.3% and the primary deficit which is fiscal deficit less interest payments was 192% of the revised estimates. Chidambaram had presented the interim budget for 2014-15 on February 17, 2014. The actual accounts up to February were released by the CGA on April 3, 2014. Within six weeks the veracity of the figures presented by Chidambaram has been questioned by his own agency," Sinha said, bemoaning how Chidamabaram instead of challenging him on facts has decided to attack him personally.
Sinha said a small news item in the print media today quoted an unnamed official of the Ministry of Finance who has claimed that the fiscal deficit for FY 13-14 was likely to be even less, perhaps 4.5% of GDP. The official has explained that the reason for this fall could be a further compression in the plan expenditure. "In the revised estimates, Chidambaram had already reduced the plan expenditure by a whopping Rupees 80,000 crore. He had done the same thing in 2012-13 also," Sinha said.
On Wednesday, Chidambaram had also blamed Sinha and his party BJP for stalling key reforms like Goods and Services Tax (GST), Direct Taxes Code (DTC) and insurance bill.
Sinha clarified today that he submitted the report of the Parliamentary Standing Committee on Finance on the DTC Bill to the Lok Sabha Speaker on March 9, 2011. "If the UPA government failed to finalise its views the fault lies with it and not with me," he said.
The former finance minister, who just like Chidambaram has this time vacated his Lok Sabha seat for his son, said the report of the Standing Committee on GST Constitutional Amendment Bill was presented on August 7, 2013. "If Chidambaram had done his home work, he could have brought the bill for passing to Parliament in the winter session of 2013. He cannot now blame the state governments of Madhya Pradesh and Gujarat for delaying the bill."
Sinha said that as for the insurance bill it was the Congress party which had insisted on FDI in insurance being restricted to 26% in 1999 against his proposal of fixing it at 49%. "Subsequently, the Standing Committee on Finance examined the bill and came to the definite conclusion that given the global financial uncertainties, FDI in the insurance sector should be restricted to 26% only," Sinha said.
Sinha claimed that he has stood by the recommendations of the Standing Committee as its chairman and the view taken by the parliamentary party of the BJP was unanimous; there was no difference between the two leaders of opposition and me on this issue. "Chidambaram's failure as far as passage of financial sector legislations is concerned was not merely restricted to these three bills. He could not get any important bill passed despite receiving the report of the Standing Committee in good time," Sinha said.
Obviously, this won't be the last that has been heard about each other from the two gentlemen.
Disclaimer: This story was originally published on 05:55 hours, May 3 2014. This is a part of our budget archives.