When I was the FM: V P Singh

RUN UP TO THE BUDGET 2004-05

There were no real compulsions except for the imperative of achieving the targets. The revenue deficit had just started showing. I had to see how to give a positive impetus within the financial compulsions to ensure that the wealth producers benefited.

ROLE OF PMO
I was given a free hand. But when Henry Kissinger came to India, he wanted to meet me and the PMO put in a word for him. I refused to meet him because I did not want people to say that my liberalisation efforts were the result of pressure from the United States.

THE SUCCESSES OF MY BUDGETS
We eased many unnecessary rules and dismantled controls, labour dues were given the first charge at the time of closure of units, stock option was introduced, Indira Awas Yojna was put in place and it was for the first time that a long-term fiscal policy was prepared. I can also take credit for introducing VAT, which was introduced in a limited manner through Modvat.

I also decided to do away with only limited scrutiny of tax assessees with up to Rs 1 lakh income, to simplify the rules. But the then CBDT chairman put in a lot of clauses, which looked like a sabotage of my proposal, and I sacked him for that.

ASSESSMENT OF MY BUDGETS
Industry was actually quite happy with the Budgets and economists welcomed my Budget announcements. Even people like Nani Palkhiwala praised it.

In fact, Euromoney voted me as one of the three best finance ministers across the world. But the protests came from the Opposition parties and within the Congress party on the increase in petrol, diesel and kerosene prices. I was blasted in the party.

WHAT I COULD NOT DO
I had planned zero-based budgeting and wanted to scrap several schemes with annual outgo of Rs 1,000-1,500 crore. These did not benefit anyone. But I could not present my third Budget.

Then I wanted to turn the government's accounts into a balancesheet, like companies have, but it ran into opposition from officials because it would have given a true picture of government finances.

MY BUDGET PRIORITIES
The challenge would be to marry the efficiency of the markets with the sensitivities of the welfare state, something that the last government forgot.

There are hardly any resources which go to the people as most of it is eaten up by the non-plan expenditure, leaving hardly any money for incremental development.

So I would have tried to put in place a mechanism for funds to reach the grassroots, since the Budget as an instrument of development, has lost its relevance. Unemployment is the biggest problem which has to be tackled.

Also, the benefits of market economy have not reached the farmers. On disinvestment, I am against the sale of profit-making PSUs, but we do not have to carry on with the loss-making ones either. We must go back to zero-based budgeting and should have a statutory Expenditure Commission as a permanent body.

Some secrecy about the Budget formulation also needs to be removed so that people can participate and understand issues. I will put in place a direct tax and excise policy for three years to make it stable and encourage investment.