Congress slams govt for corporation tax cut, privatisation overdrive

Congress leader Anand Sharma also said that the non-performing assets' level of Indian banks had gone up to Rs 11 trillion, from Rs 3 trillion

Attacking the Centre in the Rajya Sabha on the state of the economy, Congress leader Anand Sharma on Wednesday questioned the government's move to slash corporate tax as well as its privatisation overdrive.

The former Union Minister said that the government should have given money in the hands of the poor by raising the employment days in a year to 150 and increasing the daily wage under the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) to Rs 400 instead of extending the tax bonanza to corporates.

He attacked the government decision to surrender ownership of central public sector undertakings (CPSEs), saying grand clearances are being given to sell public assets built over the last 70 years.

"Profit-making PSUs (public sector undertakings) will be sold and not disinvested. Shipping Corporation will be sold, Container Corporation will be sold, Bharat Petroleum will be sold...and very cleverly," Sharma said, taking a jibe at the government.

"All those Acts of Parliament which protected the public sector undertakings, for which there were Supreme Court rulings, they have been repealed last year without discussion. So, there is a design," he said.

"One honourable Minister said that government has no right to be in business. It is a very good saying. Margaret Thatcher also said so. Look at the British economy. They are much bigger than you. Don't say that you are $3 trillion. But their population is 65 million. We are 1.3 billion people. What happened to their railways? What happened to their education system?" Sharma asked.

Leading the short duration discussion in the Upper House, Sharma noted that most economic indicators have been pointing to an alarming situation for the country.

He expressed serious doubt over the recent reduction in corporate tax helping to boost the economy, saying companies would use the tax bonanza to retire their old debts and deleverage. Moreover, the corporates would not use the money thus saved to make investments when there was no demand in the market.

The Congress leader also said that the non-performing assets' (NPAs or bad loans) level of Indian banks had gone up to Rs 11 trillion, from Rs 3 trillion.