New Delhi, Mar 2: Finance Minister P Chidambaram today averred that his Budget 2008-09 was as reformist as any other, adding that populism was not a "bad word" "More reforms have been initiated in this Budget than any other Budget," Mr Chidambaram said in an interview to the sources.
The Finance Minister said there were a huge number of reform measures that have been announced in the Budget and chose to list some of these -- Continuing with fiscal consolidation; listing of PSUs that are still unlisted; appointment of a regulator for the coal sector; deepening of the bond market, installment of a Central Plan Scheme Monitoring System which will track government spending to the last point and introduction of smart cards to distribute cheap grains through the PDS.
A pilot project with regard to smart cards is to be launched in Punjab and Haryana.
The Finance Minister said if his critics were dubbing his Budget as populist then it was upto them to do so for populism was not a dirty word.
He said the huge write off to the farm sector will help generate demand for agricultural and industrial sector and thus economic growth. In short, it will keep the India growth story going.
Asked as to why the bold reforms enunciated in the Economic Survey 2007-08 did not find a place in the Budget, Mr Chidambaram said the Department of Economic Affairs was autonomous in recommending what it thought fit. It was for the government to pick and choose from these measures.
The Finance Minister said reforming personal taxation by changing slabs once in 10 years was probably the done thing.
This year's Budget increases the income tax exemption limit to Rs 1.5 lakh from Rs 1.1 lakh and pushed upwards the income slabs on which variable personal taxes at the rate of 10, 20 and 30 per cent are calculated.
Mr Chidambaram is still remembered for his dream Budget of 1997-98, when he slashed the maximum rate of income tax to 30 per cent and reduced corporate tax to 35 per cent.
The charge that is being levelled at Mr Chidambaram is that he has brought down the tax slabs to garner votes of the middle class for his party in the impending assembly elections and later General Elections.
The Finance Minister said the move was not populist as moderate tax rates would lead to better compliance and higer revenues.
"If tax compliance improves, there is a case for moderating tax rates. In fact, changing the tax slabs will bring me more revenues," he said.
Asked as to what would be his advise to the Opposition and Left parties which were bitterly attacking his Budget, Mr Chidambaram said he had no advice to offer for he merely believed in doing his job. It was for others to see reason.
"As long as I can sustain a growth rate of 8.7 per cent per annum and make growth more inclusive, I will be happy," he said.
On a question relating to the Rs 60,000 crore loan waiver, Mr Chidambaram said the government will provide sufficient liquidity to the banking system to compensate them for this in the course of next three years.
The obvious reference in this regard was to the last loan waiver, where the bill was picked up by the next government.
The last time the government had handed out bulk loan waivers was in 1990, when the then Deputy Prime Minister Devi Lal had announced a Rs 8,900-crore loan relief for farmers.
The government then was headed by Prime Minister Chandra Shekhar, but the tabs were picked up by the next Congress government. The delay had seen many banks taking a hit on their balance sheets and reporting losses.
The Finance Minister said details of how this Rs 60,000 crore package would be refinanced to Banks will be disclosed at an appropriate forum.