Consensus on economic reforms waning – Sinha

NEW DELHI, MAR 15: Finance Minister Yashwant Sinha today said the political consensus on going ahead with economic reforms is on the retre...

NEW DELHI, MAR 15: Finance Minister Yashwant Sinha today said the political consensus on going ahead with economic reforms is on the retreat. “Political consensus on economic reforms is on the retreat. Unless we sit down and recreate the consensus, it will be difficult to achieve our aims,” he said referring to the opposition from several parties including BJP allies in Parliament to privatisation of PSUs and cut in food and fertiliser subsidies.

On the other hand, the government could not have cut socialexpenditure without inviting criticism for whittling down from its social responsibilities. Planned expenditure on basic infrastructure, rural development and agriculture could have been slashed only by imperilling the economic revival, he added.

Sinha said the government has “complete control” over the non-plan revenue expenditure which grew by only 1.8 per cent last fiscal. “We will continue to attack non-plan revenue expenditure and achieve success in its control,” he said. On why the budget has not opted for big ticket privatisation and drastic downsizing of government, Sinha said “it is not wise to expose all cards and invite building up of opposition”.

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He ruled out retrenchment of people from the government at a stroke as the current legal provisions do not provide such a step. Hence, the intake is being controlled. Expenditure control requires a sustained application of mind which the government is unable to do so and has appointed expenditure committee, Sinha said

Responding to criticism that the 2000-01 budget was not bold enough, Sinha said the government is hard put to defend the `soft’ budget especially in the face of determined opposition in parliament and outside. Sinha asked the industry leaders to change the mindset of “I’m special and I should be treated specially” and desist from seeking exemptions and sops.

Sinha, said the tax base could not have been widened further as agriculture which contributes 30 per cent of gdp lies outside the central tax net. “If large parts of the economy are beyond the tax net, even if the finance Minister stands on his head, he cannot increase the tax base,” Sinha said.

Even though stocks markets have fallen since the budget, it cannot be taken as an indicator on the fundamentals of the economy. “Stock markets are not the be all and end all for reflecting the state of the economy,” he added.

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Sinha said, the budget has been misconceived because the fiscalde ficit is seen to be unsustainable, tough decisions were supposedly not taken and the reaction of stock markets. “As time passes by, you will realise the importance of the budget proposals,” Sinha said.

He said the centre will try to sensitise all public agencies right from local governing bodies to state governments on controlling the national fiscal deficit.