Union Budget: Finance minister ‘deceived’ people of India, says Chidambaram

Expressing disappointment with the Union Budget for 2021-2022 unveiled on Monday, senior Congress leader P. Chidambaram said Finance Minister Nirmala Sitharaman had deceived the people of India, especially the poor, the working class, the migrants, the farmers, the industrial units that had been closed permanently, those who lost their jobs and the ones who are still looking for employment.

The former finance minister, addressing a press conference at the AICC headquarters, said Sitharaman had “deceived” those who were listening to her speech, especially the MPs, who he said had no clue that she had imposed cesses on a large number of products including petroleum and diesel.

Chidambaram said the Rs 2.50 on petrol per litre and Rs 4.00 on diesel per litre is a “cruel blow to the average citizen, including the farmers”.

“It was a vengeful act against the thousands of farmers who took out the longest tractor rally in history. It was also a cruel blow to federalism because the states do not get a share of the revenue from cesses,” he said. 

He dubbed the mammoth figure of Rs 223,846 crore for health a “conjurer's trick”, saying Sitharaman had added the one-time cost of vaccination—Rs 35,000 crore— and the Finance Commission grants amounting to Rs 49,214 crore to it as also the allocations to the Department of Water and Sanitation. “Shorn of these add-ons, the allocations for Health were Rs 72,934 in 2020-21 and Rs 79,602 crore in 2021-22. Given inflation, the increase is practically nil,” he said. 

The veteran leader said that the Budget speech left out important matters, such as no mentioning of defence. “She did not mention Defence at all, as if the Chinese had vacated occupied Indian territory. She did not mention that Defence expenditure in 2021-22 will see no rise. It is flat at Rs 3,47,088 crore, almost the same as the Rs 3,43,822 crore in the current year,” he said.

Chidambaram claimed that a good 40 minutes before Sitharaman read paragraph 141 of her speech, Bloomberg put out the fiscal deficit and revenue deficit numbers for 2020-21. He said this ought to be investigated. “The CBI and the ED are underworked. This could be referred to them,” he quipped.

He said the numbers show that the fiscal situation is in a mess, noting that the revenue deficit of 7.5 per cent and the fiscal deficit of 9.5 per cent in the current year have exceeded every prediction, including that of the government.

“In 2021-22 the government estimates it will borrow about Rs 3.42 lakh crore less, but nobody is willing to believe the government,” he said, adding that the ‘borrowing’ number has been under-stated by assuming that there will be disinvestment revenues of Rs 1.75 lakh crore.

He, however, said the record of the Narendra Modi government on disinvestment is poor, and remarked that another assumption of the government that tax revenues will increase by 15 per cent was also questionable.

The revenue deficit of 5.1 per cent and fiscal deficit of 6.8 per cent for 2021-22, he said, will send alarm signals to the rest of the world, especially the investors and international lenders.

Chidambaram said there was a huge expectation that there would be a significant increase in government expenditure to offset sluggish private investment and private consumption, but the numbers show that it will see a paltry rise from Rs 34,50,305 crore to Rs 34,83,236 crore. 

The farm sector, he said, has been shortchanged, with the budget allocation being reduced from Rs 1,54,775 crore to Rs 1,48,301 crore. Of the total expenditure, he said, the proportion has been reduced from 5.1 per cent to 4.3 per cent.

He criticised the government for the allocation of Rs 15,700 crore to the MSME sector, likening it to providing a fistful of oats to a hungry elephant.

On Rs 20,000 crore being set apart for recapitalisation of public sector banks, Chidambaram said it was a meagre amount since the requirement was several times more. He said, in the context of the government's intent to privatise two such banks, the intent of the ruling dispensation is clear—let the public sector banks bleed slowly so that they can all be privatised in the short term.

The tax reliefs and the tweaking of provisions of the tax laws completely by-passed the tax paying working class and the tax paying middle class, Chidambaram said, claiming that each of the measures announced by the finance minister will benefit only the tax payers among the richer classes.

He expressed disappointment over no cut in GST rates, saying the mess of multiple rates remains.

Chidambaram said that as expected, Sitharaman has paid special attention to election bound states by announcing large capital outlays for Kerala, Tamil Nadu, West Bengal and Assam. “People are not fools. They know that the proposals are only outlays and the actual expenditure will happen only after the schemes are approved and over a period of several years depending upon the pace of implementation,” he said.

“The Finance Minister had promised a Budget 'like never before'. Her mandate was to present an annual statement of revenue and expenditure for 2021-22. What she did, however, was to estimate expenditure over two years or three years or four years or, in one case, over five years. She made a reference to the Honourable Prime Minister 14 times and to the farmers 11 times,” Chidambaram said, adding that the budget was a let down like never before and like the previous one, “will unravel sooner than you think.”