September 5, 2013
Saugata Roy speaks on the Supplementary demands for grants
Sir, I rise to speak on the first batch of Supplementary Demands presented by the Finance Minister. Before I proceed further, I want to read Rule 216 from the Rules of Procedure and Conduct of Business in Lok Sabha. It says:
“The debate on the supplementary grants shall be confined to the items constituting the same and no discussion may be raised on the original grants nor policy underlying them save in so far as it may be necessary to explain or illustrate the particular items under discussion.”
From Ananth Kumarji onwards, I have heard several speeches. Nobody has referred to the supplementary grants on which permission of the House is sought. Sir, I did not want to disturb anybody. Sir, I just want to point out that (Expunged as ordered by the Chair) following the rules nor are we following the rules.
Sir, (Expunged as ordered by the Chair) Sir, you had been the Deputy-Speaker and you know that. The Chair could say that you keep to the supplementary demands.
Sir, since the Chair has shown leniency in the matter of applying the rule, I shall take advantage of the same and submit my points.
My first point is with regard to West Bengal. The present Government in West Bengal, which came to power in 2011, inherited a total outstanding debt of Rs. 2,03,000 crore left by the previous Government. The previous Government had brought in the Fiscal Responsibility and Budget Management Act very late. The Central Government and the State Government borrow and borrow and borrow. Now, the new Government is bearing the burden of Rs. 2,03,000 crore of debt, for which it has to pay almost Rs. 20,000 crore in interest and principal. All of us from the TMC has been raising the demand to give us the moratorium on interest payment for three years. We made this demand to the previous Minister of Finance and we are making this demand again to the present Minister of Finance. For political reasons you tweak the law or the norms to give Bihar a special grant. We have no quarrel with that. So, tweak the law or the norms again to give West Bengal this moratorium, which we have been seeking for a long time. So, this is my first point, that is giving economic justice to West Bengal. The Minister of Finance is not here. But I am sure he would be listening to this debate somewhere. So, I hope he would respond to my demand.
The second point that I want to make is that this is not a very big Supplementary Demand. The total Demand is only to the tune of Rs. 7,497 crore. The actual outgo to the exchequer is only Rs. 127 crore. The rest will be matched by savings of Ministries and Departments or by enhanced receipts recovery. So, actually the Supplementary Demand is only for an outgo of Rs. 127 crore. This is not a very big amount. So, nobody can object. After all, the Government has to run.
The main thing to notice is that the Minister of Finance has taken maximum amount of this money for his own Ministry. That is to fulfil the promises he made in the Budget. He should have kept the provisions in the Budget. He did not. So, he is now seeking for Supplementary Demand.
For setting up Nirbhaya Fund and for National Skill Development Corporation, he is asking for Rs. 2,000 crore; and for payment to the IMF, for provision of loans to the IMF, he is asking for Rs. 1,830 crore. We will soon have to go to the IMF for loans. We are giving the IMF this Rs. 1,830 crore from our Supplementary Demand!
Secondly, he is spending Rs. 100 crore for equity in micro finance institutions, for setting up a Credit Guarantee Fund Rs. 500 crore, and for establishing a women’s bank Rs. 1,100 crore. The Minister of Finance did not make provisions in the Budget for the schemes that he had announced. So, now he is coming and asking for Budgetary support. But he has a right to do that because he has saved most of this money.
Having said that this is a minor Supplementary Demand, let me say a few points on the economy. The Minister of Finance, along with the Supplementary Demand, presented a Medium Term Expenditure Framework Statement, to be laid before the Parliament as required under the FRBM Act. There, he has mentioned that the Budget 2013-14 was made on the assumption that there will be GDP growth in the range of 6.1 to 6.7 per cent. Now, what is the position? It is being estimated that this year the growth will be as low as 4.2 per cent. So, the basic premise of the Minister of Finance in his Budget, as shown in his own Report, is broken. There is no growth as expected. This means that there will be less employment, there will be less development, etc. We have mentioned several times in the House, and Sir, even you have raised that the economic situation is very serious. Every day, I look at the news to know as to what is the situation today. I just read that the Sensex is up by 488 points; the rupee gains 138 paise to Rs.65.69 against the dollar in the early trade. There has been improvement. Why? It is so because yesterday a new Reserve Bank Governor has been appointed. He has said that he would give emphasis on reviving growth rather than controlling inflation. He has said that henceforth the Reserve Bank’s permission would not be needed to open new branches. He has said that he would try to improve the rupee. Now, our new RBI Governor is a favourite with the Americans. He was a Professor in the Chicago University’s School of Business.
Now, there are two things that I want to mention. Our new RBI Governor was a distinguished Professor, a very distinguished academic. But this same Chicago University has the reputation of advising the American Government wrongly which led to the 2008 crisis in America. Yes, Dr. Raghuram Rajan. He was a distinguished Professor. He was one of those who advised the American Government which led to the crisis in 2008. This is a matter of record. Again I want to mention one thing.
Sir, I have great respect for Shri Jaipal Reddy. I had worked under him in the Ministry. He keeps news of what happens. But I am again referring to a fact. I did not refer to the new RBI Governor by name. I said that he was a distinguished Professor at the School of Business in the Chicago University. The same Chicago University Group advised the American Government and that led to the crisis in America in 2008. I did not say Dr. Raghuram Rajan advised. I am within my right to say that. Sir, again, let us see what else news is there.
I am coming to the point. Yesterday, the RBI Governor has announced measures to strengthen monetary policies and to open new bank branches. I am again saying that the economy is in a shambles. The economy is in a mess. The promised fiscal deficit of 4.8 per cent will not be kept and the promised Current Account Deficit of 4.9 per cent will not be kept. The rupee is in a free fall. People are predicting it.
Sir, let me speak a little more. I seek your indulgence. I have not completed my speech. Due to the free fall, the rupee is expected to reach Rs.72 per dollar in a few days. Where will the people go?
Now, I would just mention a few points and then wind up. Please give me two more minutes. The Government is sending confusing signals on the economy. On the one hand, they are saying: “We have opened up all sectors to FDI. FDI inflow will reduce the Current Account Deficit.” They are further saying this. Shri Chidambaram said in this House on that day: “We are removing all controls.“
The answer to present economic mess is not less reforms but more reforms. Yesterday, he has passed a Bill for pension reforms. Tomorrow, he is slated to pass a Bill on SEBI reforms. So, on the one hand, you are showing that you want total freedom for corporate, for foreign corporates to come into India. Now, what are the corporates saying about the Government? Just the reverse – the same Government speaking in two voices. You must listen to this. It is very interesting. They want to attract the corporates but corporates, including Shri Ratan Tata, including Shri Rahul Bajaj are saying that Food Subsidy Bill would add to the fiscal deficit. Which line are you following? On the one hand, you are giving all licenses to corporates and bringing in FDI.
After the Food Security Bill, we are very interested in knowing about what ratings we receive in America. What have Moody said? Moodi in the financial rating companies has given a statement saying that this Food Security Bill will add to the fiscal deficit. So, what are you trying to achieve? More growth, less inflation or election-oriented, subsidy-oriented projects. That is not happening. Growth has become stunted.
As early as August 30, 2013, Food Bill will worsen economic woes, says Moody. Measures will raise Government’s spending on food subsidies to 1.2 per cent of GDP per year from the estimated 0.8 per cent currently. To which side the Government is moving? What do they want to achieve? What does CII President say? He said, such a large outlay at this point of time would definitely have a negative impact on the fiscal deficit. So, the whole corporate India is against your step and you are trying to make them happy. What do you mean by “happy”, Sir?
Last year, how did Mr. Chidambaram contain the fiscal deficit? He cut Plan expenditure by Rs.93,000 crore. You will agree that in a developing country, in a poor country, basically to develop the economy, you will have to increase Plan expenditure, which will mean more roads, more schools, more colleges, more infrastructural projects. But we are cutting Plan expenditure and saying that our fiscal deficit should be controlled. As a result, the whole country is in a genuine crisis. I do not know when this crisis will blow over but I may say that I am receiving only confusing signals from the Government. Why prices rise? Onion price goes through the roof. Gas price is raised. Diesel price is raised. The price of cooking gas will be raised by Rs.50. the price of aviation turbine fuel will be raised. What are we aiming at? The Government must state clearly.
Mr. Chidambaram has not fulfilled the promises and the economy is at its lowest pace. In four years, in the first quarter of this year, it was at 4.4 per cent. This is the situation, Sir. Country is in an economic mess and it has not come out of it. This Supplementary Budget is a chicken feed – Rs.14 lakh crore is your expenditure – and it is only for Rs.7,400 crore. But it will have no impact on the economy of the poor.
