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A balanced Budget is need of the hour
February, 09th 2010

Calling for a balanced Budget, Yashwant Sinha, Leader, BJP, says the recovery is not strong yet as global markets are still uncertain. He feels 2009 will go down in history as the year in which the government failed to control inflation. "We expect the government to tackle food inflation in the upcoming Budget."

The party, he says, will be happy if the government moves towards fiscal consolidation. "We are concerned about the fiscal deficit."

Speaking on the government's much hyped and talked about National Rural Employment Guarantee Scheme, the former Finance Minister of India says the scheme should not be the driving force for recovery. "NREGS is a bottomless pit of corruption."

Welcoming the new direct tax code, he stated that the party expects its suggestion on the draft code to be included. The BJP wants tax incentives for savings and housing to continue. It has opposed any move from the exempt-exempt-exempt regime applied to savings such as provident fund and gratuity to exempt-exempt-tax.

It wants the different tax rates on long-term and short-term capital gains to continue, and has opposed higher rate of taxation for non-resident Indians. It has demanded that the tax-free income threshold on certain vulnerable sections such as women, retired persons and senior citizens be raised to Rs 3,00,000.  In a move that won't find favour with India Inc, the party has stated that it is against withdrawal of area-based exemptions and has opposed tax holiday for industries till they recovered capital expenditure.

On the proposed Goods and Services Tax, Sinha says there is no clarity on a large number of areas. "Evolution of the rates should be discussed between the government and states." He had earlier suggested a one-year extension of the implementation deadline to April 1, 2011. 

When asked what his stance will be on the contentious issue of linking fuel prices to the market, Sinha says any such move would be opposed.

Here is a verbatim transcript of the exclusive interview with Yashwant Sinha.

Q: What are your expectations from the Budget?

A: In the budget I would certainly look forward to the finance minister indicating how he would tackle food inflation. I would expect him to come up with some very concrete solutions.

I told Mr. Mukherjee in Lok Sabha that dont depend on monetary economists. You have a large number of monetary economists surrounding you, and you dont depend on them because as many people are saying I am not an economist but I understand as much that monetary measures alone will not suffice. We need supply side measures and we need actual supplies.

Q: The direct tax code the BJP has been very vocal in its opposition to this, some areas of the DTC are under review as publically stated by the finance minister himself, there is a question mark on whether in some fashion it would be introduced in the budget session or not, will the BJP support the direct tax code after the changes or the review has been made as per the finance minister?

A: If you have seen the paper which was submitted by our representatives to the finance minister, we start by saying that we welcome this initiative to have a new direct taxes code. And we also acknowledge the fact that there is a discussion paper which has been put out by the government and we have given our suggestions because we found that there were many infirmitives and contradictions in the direct taxes code which needed to be corrected.

So we have given our suggestions and we hope that our suggestions along with other suggestions will be taken into account before it is finalised.

Q: The Kirit Parikh report has been submitted. The BJP, the NDA Government had tried to move towards a partial dismantling of the APM. Will you support a price rise if the government were to move ahead with some of the recommendations of the Kirit Parikh report?

A: We had on 1st April 2002 announced a de-regulation of the petroleum sector which was completely undone by the first UPA government. Now we have this Kirit Parikh Report. This is not breaking new ground, they are only repeating the old formula.

When we dismantled and whenever there was price rise, the Congress party representatives didnt come and garland us at Vijay Chowk. So we are not going to garland them at Vijay Chowk.

Q: So are you going to oppose it?

A: Why not? This is politics, and they did exactly the same thing to us. So this is a fair game. We will oppose the price rise on petroleum products.


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