No consensus on deficits: Yashwant

A major goal of the government was to reduce fiscal deficit but a political consensus on the issue was necessary. All political parties, including the BJP, opposed his move to cut the fertiliser subsidy during the last budget. That forced him to withdraw the act, and earned him the nickname “Rollback Sinha”.

Sinha welcomed FICCI president Sudhir Jalan’s suggestion that five per cent of provident fund (PF) amount should be invested in the capital market but said provident fund trustees did not have confidence in the market. He said the small investors have to be attracted to the market, which was “thin” at present, and it was the responsibility of business and industry to do so, although the government was ready to take the required steps.

On the public sector undertakings (PSUs), he said the environment has changed now and those PSUs which were sick for a long time would be closed down. Eight PSUs fell in this category and the workers would be given an attractive separation package.

Sinha said some PSUs, which had slowed down because of the restructuring of the economy, would be rejuvenated by pumping money in them. The Government would only then disinvest or privatise such PSUs, he said.

In the third category came those PSUs which were profit-making and the government should not and would not run them. The Government would sell 74 per cent shares and have only 26 per cent stake in them. In some other good PSUs, the Government would have only 49 per cent stake. But, there would not be any disinvestment of the strategic industries, he said.

The Finance Minister was in favour of bringing continuity in the rates of direct taxes and reducing the slabs of the indirect taxes to three. He also favoured reduction in exemptions and exceptions in Customs, Excise and Income Tax. He called for suggestions from FICCI and GCCI to do away with the distortions in Customs.

Earlier, Jalan said India would be the first fastest growing economy in the world with 5 per cent GDP after China (7 per cent) and Poland (5.1 per cent). India was undergoing a slowdown phase and not recession, he said.

He said Gujarat should emphasise on bolstering service and information technology industries besides concentrating on textile and petrochemical industries.

GCCI president Utkarsh Shah demanded abolition of octroi and solving problems like supply of gas to Pipapav gas-based power stations, Sardar Sarovar Project and non-availability of financial contribution of the participating states.