Saturday, June 21, 2014

Inflation one of the reasons for poll defeat, admits PC

New Delhi: In his measured and firm tone, former finance minister and senior Congress leader P. Chidambaram said that he did not agree with prime minister Narender Modi’s “coffers are empty” argument, and reeled out the figures to prove his point. “We would be happy if the BJP/NDA comes out of the ‘campaign mode’ and gets on with the business of governing the country. We wish the Government well in its efforts.”

In a surprise media briefing at the party office on Friday afternoon, he said that the cash reserves left behind by the UPA government as on June 1 this year was Rs 26,510 crore compared to the negative Rs 2730 crore that NDA left behind after its 1998-2004 tenure. He also quoted the figures for power generation (243,000 MW), petroleum refining capacity (207 million tonnes), farm sector production (263 million tonnes).

He has warned that the Great Recession is not yet over, and the projected GDP growth for the United States has been reduced from 2.8 per cent to between 2.1 and 2.3 percent. “The Government will face headwinds,” he said and accepted that rise in crude oil prices could be one of them.

He also observed that the “state of the Indian economy has to be seen in the context of the world economy,” that there will be “ups and downs” and this will be reflected in the Indian economy.

In response to a dna query whether the Congress had lost the Lok Sabha election because of the tough economic situation, Chidambaram initially said that he cannot speak on the issue -- regarding poll debacle -- because the party was looking into it. But he conceded that inflation was one of the reasons for the defeat.

Asked as to what is advise he would proffer his friend and finance minister Arun Jaitley, Chidambaram shot back, “I do not give unsolicited advise,” and asked to rate Jatiley’s performance in nearly a month, he quipped, “I am not a rating agency.”

With regard to Vodafone, Chidambaram said that according to tax experts the Vodafone-Hutchison transaction attracted capital gains tax. He said that the government tried the conciliatory track, and offered that if an agreement was reached about the penalty to be paid then the amendment to the Income Tax Act made by then finance minister Pranab Mukherjee would have been repealed. But with Vodafone going in for arbitration, -- former chief justice of India R.C.Lahoti has been appointed arbitrator -- it will be necessary to wait and see.

He said that SEBI’s new recommendation that PSUs must offer 25 per of their share holdings in the retail market was a good one, and that as finance minister he had nudged SEBI towards that.


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