| "Except in Q2 2004-05, when the GDP grew by 6.7 per cent, in every other quarter of the last 10 (including the current one), growth rate has been over 7 per cent," he said. |
| Chidambaram added that this meant it is not right to assume a coalition government cannot deliver high growth. |
| He made the remarks while delivering the ninth JRD Tata Memorial lecture on Economic Policy Making in a Coalition Era organised by Assocham. Chidambaram added that several other macro economic indicators were extremely positive. |
| However, the finance minister made a clear reference to the need to continue with a calibrated and conservative approach on the fiscal front. |
| "When the ship of the economy appears to be cruising at a comfortable speed, or as elections approach, the attractiveness of fiscal expenditure becomes irresistible. There is a temptation to resort to higher levels of government spending and lower taxation which are believed to be magnets for voters. Such a liberal stance actually shifts the fiscal cost from this generation to future generations. While more spending and lower taxes may have immediate tangible benefits, the hidden costs are not visible to the current voters," he added. |
| Chidambaram cautioned that coalition governments tend to become "somewhat liberal or populist" in their fiscal stance as elections near. He added that it is possible to discover "our own model of governance even under a coalition government". |
| As a first step, he added, the coalition partners should agree on a common platform before the elections rather than after them. |
| "It should be a minimum programme, leaving enough space for the actual members of the government to experiment and innovate in areas falling outside the minimum programme," he added. |
| It should be written in precise language so that there is little room for ambiguity or argument," he added. |
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