Karan Thapar interviewed Finance Minister Pranab Mukherjee, fresh from presenting his budget, for CNBC-TV18. Excerpts from the conversation in which he outlined his strategy for growth.
Let us start with the fiscal deficit. You announced that it would be 6.8%, which is sizeably more than the 5.5% you announced at the time of the interim budget or even the estimated 6.4% after one took into account your excise duty and service tax cut. Does 6.8% worry you?
Of course it is worrisome. But I had to take the calculated risk because I wanted to have higher growth and domestic demand-driven growth. So I had to inject a substantial quantum of money in the system.
Now, the President’s address was about disinvestment, the economic survey spoke of a target as high as Rs 25,000 crore. But you put your target at a fraction of that at just about Rs 1,100 crore?
No, that I did not spell out because that is nominal, but what I have done is that I have laid out the philosophy and we shall have to take all the stakeholders together and we shall have to see how best we can do. I cannot in my budget speech simply read out that I am going to disinvest from such and such public sector undertaking or such and such sectors. It is not possible and I would not like to create the type of controversy which arrives in regard to the disinvestment programme which was followed in the earlier regime.
I do not know why the stock market fell so sharply because to my mind it is not merely because of that.
Another area where people heard your budget speech but came away a little disappointed was that you didn’t say anything about raising insurance caps nor did you say anything abut raising other foreign direct investor (FDI) cap.
You have to keep in mind that the situation in which I had to present the budget is not a very easy situation and it is a bit difficult. So far as the Economic Survey is concerned, it is a very credible document and we maintain the credibility because though it is prepared under the supervision and guidance of the finance minister, the experts are free to give their candid views…but when I formulate the budget, I shall have to keep in mind on various other things. There is a difference between the desirability and the achievability.
So you are gambling entirely, aren’t you, on the impetus you are giving the economy?
No, I am not gambling. I am taking a calculated risk to have demand-driven growth.