FM for political consensus on economic policy

Finance Minister P Chidambaram today stressed the need for a political consensus on the shape and direction of economic policy in the coming decades, and presented a bullish picture of the economy while replying to the debate on the general Budget in the Upper House of Parliament.

The Appropriation Bill was passed by the Rajya Sabha subsequently and sent back to the Lok Sabha which had cleared it yesterday.

"We should work to evolve a consensus on how economic policy should be conducted over the next 10-20 years," Chidambaram said.

The finance minister said that the country would see a growth of 6.9 per cent this year and added that inflation would drop below 5 per cent from a high of 8.7 per cent.

Expressing confidence that the country would see another year of high growth, making it the third year in a row, he said each of the MPs in the House should carry the same message of confidence to their states and their constituencies.

As part of his reply, the finance minister also said the highest amount of non-performing assets (NPAs) and tax arrears ever had been recovered this year and that this disclosure was merely a "teaser" and he would reveal more during his presentation of the Finance Bill.

Taking on the Opposition, Chidambaram said his detractors in the Opposition benches, Yashwant Sinha and Arun Shourie, who had predicted that last year's Budget was "retrograde" and would usher in higher inflation, lower growth and harm the poor, were not present as they had been disproved.

He said the Reserve Bank of India (RBI) and other independent credit agencies had shown that investment had seen a revival in 2004-05. Reports from some of these agencies had indicated a 20 per cent increase in credit growth and non-food credit had climbed to the highest ever in the last 10 years.

These growth figures, he said, had translated into the additional outlay provided for in the National Common Minimum Programme (NCMP) related activities, pointing out that an additional allocation of Rs 25,000 crore had been made for NCMP programmes, taking the total figure to Rs 75,000 crore.

Talking about 'Bharat Nirman', the FM said that it was not a "slogan" inspired by some "textile company" as some other slogans that were coined last year were, but was a collection of "sound programmes".

Terming the closure of small scale industries (SSI) as a "myth", he said that while some units had closed down, an equal number were coming up.

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The big picture

The Appropriation Bill was passed by the Rajya Sabha

Chidambaram said the country would see a growth of 6.9 per cent this year

He also said inflation would drop below 5 per cent from a high of 8.7 per cent

The finance minister added the highest amount of non-performing assets and tax arrears ever had been recovered this year