In his post-budget interview, finance minister Pranab Mukherjee talks to NDTV chairman Prannoy Roy and chairman Business Standard Ltd TN Ninan about reforms, subsidies and compulsions of coalition politics. Edited excerpts:
Prannoy Roy: Is this one of the most difficult political times for you?
This is a difficult time both politically and economically. Back in 2008, when I assumed the responsibility of finance ministry after a quarter century, it was one of the most difficult year because of the international financial crisis.
Roy: That time you had the Left, now you have the Trinamool?
No, you know the alliance partner or the alliance supporter, net result is the same that I shall have to carry conviction with them
Roy: Which is easier to carry though, Left or Mamata?
It's very difficult to make an assessment but anyway the net result is same. In a country of India's size you cannot go for general elections every year.
Ninan: Looking at your numbers, it seems to me that you've actually left the job still to be finished because you've shown reduction in the petroleum subsidy bill for next year and a sharp reduction at a time when oil prices have gone up, the implicit assumption or conclusion that one can draw that you're going to be raising petroleum product prices some time, is that a correct conclusion?
No when I said you shall have to make the subsidies to 2% of the GDP and in the next three years it will have to be brought down to 1.75% of the GDP, message is quite clear. There are two ways you could do it, you could do it through legislative actions or you could do it through executive actions.
Roy: No I think what Ninan is saying that Rs. 68,000 crore is the subsidy on petroleum this year, next year you've said Rs. 43,000 crore, so Rs. 25,000 crore less subsidy on petroleum. Does that mean there will be a hike in diesel prices or petrol prices in coming months?
Prime minister has clearly indicated these are the areas where executive actions are called for. Like petrol is already deregulated. Petroleum has been deregulated in last June.
Roy: So prices will go up?
Ninan: Is that the intention that prices will go up?
Yes, it seems because $90 was the assumption when I presented the budget last year, average prices would be $115, today it has gone up to $120 or $123. I’m keeping a daily track on the Brent crude prices.