Union budget a let down like never before, farm sector has been shortchanged, fiscal situation in mess: Chidambaram

New Delhi [India], February 1 : Alleging that Finance Minister Nirmala Sitharaman has "deceived the people, especially the poor" in the union budget presented on Monday, Congress leader P Chidambaram said farm sector has been shortchanged, the fiscal situation "is in a mess" and the government has shown its "unconcealed desire to sell-off all public sector banks".
Addressing a press conference here, he said there was no mention of defence in the budget speech and the "mind-boggling figure" of Rs 223,846 crore for heath was "a conjurer's trick".
"The budget was a let down like never before. This budget, like the previous one, will unravel sooner than you think," he said.
The former Finance Minister said the Congress had listed "two non-negotiables" and the "government has miserably failed the people of this country".
"She deceived the people of India, especially the poor, the working class, the migrants, the farmers, the industrial units that had been closed down permanently, and those who had lost their jobs, both regular and informal, and are still looking for jobs," he said.
"She deceived those who were listening to her speech, especially the MPs, who had no clue that she had imposed cesses on a large number of products including petroleum and diesel: Rs 2.50 on petrol per litre and Rs 4.00 on diesel per litre is a cruel blow to the average citizen, including the farmers," he added.
Chidambaram said it was "a vengeful act" against the thousands of farmers who took out the longest tractor rally in history. "It was also a cruel blow to federalism because the states do not get a share of the revenue from cesses".
"She did not mention Defence at all, as if the Chinese had vacated occupied Indian territory. She did not mention that Defence expenditure in 2021-22 will see no rise. It is flat at Rs 3,47,088 crore, almost the same as the Rs 3,43,822 crore in the current year.
He said the Finance Minister gave out "a mind-boggling figure of Rs 223,846 crore for heath, a breathtaking 'rise' from the BE of the current year of Rs 94,452 crore".
"As I had warned, it was a conjurer's trick. She added the one-time cost of vaccination (Rs 35,000 crore) and the Finance Commission grants amounting to Rs 49,214 crore. She also included the allocations to the Department of Water and Sanitation. Shorn of these add-ons, the allocations for Health were Rs 72,934 in 2020-21 and Rs 79,602 crore in 2021-22. Given inflation, the increase is practically nil," he said.
"However, on page 10 of the Budget at a Glance, the two numbers are Rs 82,445 crore and Rs 74,602 crore -- which means a reduction in expenditure from the level in the current year. What kind of additional health infrastructure can be built with this parsimonious allocation?" he asked.
He said fiscal numbers show that "the fiscal situation is in a mess" and revenue deficit (7.5 per cent) and the fiscal deficit (9.5 per cent) in the current year have exceeded every prediction, including that of government.
"In 2021-22 the government estimates it will borrow about Rs 3.42 lakh crore less, but nobody is willing to believe the government. The 'borrowing' number has been under-stated by assuming that there will be disinvestment revenues of Rs 1.75 lakh crore. The record of this government on disinvestment is poor. The government has also assumed that tax revenues will increase by 15 per cent -- another questionable assumption," he said.
The Congress leader said that revenue deficit of 5.1 per cent and fiscal deficit of 6.8 per cent for 2021-22 "will send alarm signals to the rest of the world, especially the investors and international lenders".
He said there was a huge expectation that there will be a significant increase in government expenditure to offset sluggish private investment and private consumption.
"The numbers show that total government expenditure will see a paltry rise from Rs 34,50,305 crore to Rs 34,83,236 crore."
He said the budget allocation for 'Agriculture and Allied Activities' has been reduced from Rs 1,54,775 crore (BE) to Rs 1,48,301 crore (BE). "Of the total expenditure, the proportion has been reduced from 5.1 per cent to 4.3 per cent.
Chidambaram said budget allocation for Market Intervention Scheme, Price Support Scheme and PM Kisan Samman Nidhi has been reduced.
He alleged that MSMEs "were dismissed" in one sentence with an allocation of Rs 15,700 crore. "This is like providing a fistful of oats to a hungry elephant. Nothing was mentioned about providing liberal, low-interest loans, working capital or moratorium."
He said a meagre sum of Rs 20,000 crore has been set apart for the recapitalization of Public Sector Banks, when the requirement is several times more.
"At the same time, the government intends to privatize two PSBs. The intent of the government is clear: let the PSBs bleed slowly so that they can all be privatized in the short term. Let us see the reaction of the public to this unconcealed desire to sell-off all public sector banks."
Referring to tax changes, he said each one of the measures announced by Sitharaman ill benefit only the taxpayers among the richer classes.
The minister said multiple GST rates remain and "saga of protectionism continues" in terms of tariffs.
He said the Finance Minister has paid special attention to election-bound states but people realise that only outlays had been announced and actual expenditure will happen only after the schemes are approved.
Referring to Sitharaman's remarks about "like never before" budget, he said her mandate was to present an annual statement of revenue and expenditure for 2021-22.
"What she did, however, was to estimate expenditure over two years or three years or four years or, in one case, over 5 years," he said.