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‘India must not only think big but act in a bigger manner’

india Updated: Feb 27, 2010 02:48 IST

In his first interview after presenting the Budget, Finance Minister Pranab Mukherjee spoke to Raghav Bahl, editor, Network18.

How would you define today’s Budget?

I had three basic objectives. First, we must come back to the path of higher growth; second, we must move on the path of fiscal consolidation; third, we must have inclusive growth, which is an article of faith for the government.

You said this Budget speech wouldn’t just be a statement of income and expenditure. You wanted to dwell on the vision statement of the Budget as well. Was this learning from the last time when there was some criticism that you dwelt too much on the minutiae of the Budget and the vision was lacking?

You are correct to some extent. I also thought temporary concerns like price rise, etc, are there but the time has come when India must not only think big but act in a bigger manner so that it can take its rightful place in the comity of nations.

With petroleum pricing, you did the expected thing of hiking tax, which is fine. Would it not have been possible for you to articulate how you intend to deregulate oil prices?

Frankly, this should not be a policy matter. In our context it has assumed policy dimension but economically, it was an action taken by the government before 2004. Deregulation was already there.

As you have honestly admitted, before 2004, during the NDA regime, global petroleum prices swung from $ 20 to $ 35, and we were flexible in what we did to address that. Why is the UPA alliance being so rigid in handling petroleum prices?

Firstly, we ourselves did it (went back on deregulation). That’s why it is bit difficult to switch back again. It would be interpreted as though we did not know our minds. Secondly, there is some individual angularity but I would not like to go into that. This issue needs to be addressed and that is why…. Not only the Kirit Parikh committee, but also earlier the Rangarajan Committee gave its recommendations, volumes of recommendations are available.

On the other issue of Goods and Services Tax, you used very cautious language and there is concern that we will attempt and endeavor, but there are phrases (in your speech) which allow a way out if it doesn’t get done?

I would not say that I have a doubt in my mind. But there 28 states and I'm concerned with the consensus which has to be brought about amongst the various stake holders. I should not assume that everybody willfall in line. What I would say is that the empowered committee of the state finance ministers is doing a good job, The areas of divergence has been narrowed down substantially. The clear message I have conveyed that goods and services tax would be about 10 per cent.

There are certain areas where action has been delayed inordinately. The insurance bill lets say. Your government took a decision in 2004, we are in 2010 but the bill hasn’t gone through.

It is because of certain reasons. The Companies’ Bill, I think we will be able to get it done. But there is a problem in respect of the insurance bill, the banking bill and the pension bill.

What was the problem?

A: We didn’t have a numerical majority in both houses of parliament. Without the support of the Left and other allied parties, we could not proceed further.