India headed towards economic depression: Yashwant Sinha

Nagpur, Mar 7 (UNI) Former Union Finance Minister and senior Bharatiya Janata Party (BJP) leader Yashwant Sinha has warned that the country was headed towards economic depression.

Delivering a lecture on the budget for 2008-2009 here today, Mr Sinha said that there has been a dip in the quantum of savings and demand for goods was decreasing. The economy of the United States was slowing down, and it would affect the economies of all countries in the world, including India, he said.

''India's economy is going into a phase of depression. It is clear that there are difficult days ahead for the country,'' he said.

Mr Sinha said that the looming depression was one of the two major features of the second tenure of P Chidambaram as the country's Finance Minister. The other major feature of what Mr Sinha described as ''Chidambaram Mark II'' was the deficit to the tune of Rs 220,000 crore, which had not been mentioned anywhere in the budget document.

The fiscal deficit for 2008-2009 would be Rs 110,000 crore, which was 2 per cent of the gross domestic product (GDP), as predicted by noted economist Govind Rao, Mr Sinha said.

The recommendations of the 6th Pay Commission were expected to put a burden of another Rs 50,000 crore on the exchequer, the former Finance Minister said.

In addition, there was a deficit of Rs 60,000 crore on account of the loan waiver granted to small and marginal farmers, he said.

The burden of the loan waiver was a deficit since the Finance Minister has given no indication till date as to how the necessary funds would be raised, he said.

Mr Sinha reiterated that the budget sounded more like the election manifesto of the Congress rather than the financial statement of the government.

''In a budget, every penny that is earned and spent has to be accounted for. In a manifesto, a party can make any promise without specifying where the money will come from. The Finance Minister has done exactly that -- made promises without telling us where the money will come from,'' the BJP leader said.

It was unfortunate that such a budget should have been presented to Parliament when an economist of repute (Dr Manmohan Singh) was heading the government as Prime Minister, he added.

UNI AB MAZ YA AS2006