Yashwant Sinha’s tenure as FM worst since 1991: Chidambaram

Finance minister P Chidambaram on Thursday launched a scathing attack on BJP leader Yashwant Sinha, describing the latter’s tenure as FM as the worst years for the Indian economy since 1991.

Finance minister P Chidambaram on Thursday launched a scathing attack on BJP leader Yashwant Sinha, describing the latter’s tenure as FM as the worst years for the Indian economy since 1991.

“On July 1, 2002, Sinha demitted office as Finance Minister. I may point out 2000-2001 and 2002-2003 were the worst years since liberalisation in terms of growth and Prime Minister (Atal Behari) Vajpayee was forced to replace the Finance Minister,” Chidambaram said in response to Sinha’s interview to HT published on Thursday.

Sinha, who headed the parliamentary standing committee on finance, also favoured hastening of tax reforms, which drew sharp remarks from Chidambaram. "I am not amused. When a consensus on GST was nearly reached, it was the governments of Madhya Pradesh and Gujarat (both BJP-ruled states) that stalled further progress."

"In the case of DTC, a draft Bill got ready in 2009, a revised Bill was introduced in Parliament in 2010, the Bill was considered by the Standing Committee on Finance (chaired by Sinha)," he said.

“Between 2009 and 2013, the original draft underwent many changes, some of them not consistent with the objectives of a new DTC. In fact, some of the changes proposed by the Standing Committee on Finance took the original draft back to the regressive provisions of the Income Tax Act, 1961 Ministry of Finance has now prepared a new DTC and has put it in the public domain,” he said.

Goods and services tax (GST), aimed at stitching together a common national market by removing local levies such as octroi and value added tax (VAT) into single tax, has remained stuck because of lack of political consensus among states.

Likewise, plans to introduce a DTC, a modern legislation to replace five-decade old Income Tax Act, have not taken off for many years.

The war of words between Sinha and Chidambaram comes at a time when the BJP has sharpened its attack on the Congress over several issues.

Sinha had claimed that the UPA’s “real mistake” was committed in 2008-09 under P Chidambaram’s watch when the fiscal deficit shot from 2.5% to 6% in just one year.

Chidambaram directly accused Sinha for not cooperating with the government to pass the Insurance Bill that envisages hike in the FDI cap to 49%. Recalling that he met opposition leaders several times, Chidambaram said the two leaders of the Opposition had “promised” to help passing them. But the Bill was not passed.

“I got the impression that it was the opposition of Shri Yashwant Sinha to cooperating with the government that pushed the BJP to take the position that it would not support passage of the Bill during the tenure of the UPA government,” Chidambaram added.

On the allegation that the government has postponed the payment of subsidies to help present better fiscal deficit figures, Chidambaram said it was “either borne out of ignorance or is mischievous”.

The subsidy bill of each year is paid at the end of every quarter and, therefore, the bill for the fourth quarter is paid in the first quarter of the next year. At the same time, the bill for the fourth quarter of the previous year is paid in the first quarter of the current year, he said.

“What is important is, bills for four quarters are paid every year. This has been the practice for many years and nothing unusual has happened in 2013-14,” Chidambaram said.