Vijay Kelkar, adviser to Union Finance Minister Jaswant Singh, got an ardent supporter in Manmohan Singh, Leader of Opposition in the Rajya Sabha, who lauded the Kelkar panel report on the 'tax reform' but attacked the finance minister for 'comprehensively ignoring it.'
Initiating the discussion on Budget, Singh said the task force set up under the 'eminent economist' had drawn a future roadmap for the tax reforms.
He was, however, quick to qualify his statement by saying: "I do not agree with every suggestion in that report."
Realising that his praise for Kelkar was vulnerable to various interpretation, Singh put the record straight and said he did not agree with the suggestion to tax the agriculture as this 'is unfeasible.'
Singh said the government must give serious thought to Kelkar's suggestion of reforming the 'exemption-ridden tax system.'
In a speech laced with figures, the former finance minister criticised the government for giving up 'macro management' while formulating the Budget.
He said there was no effort to raise the tax-GDP ratio, which was going downwards.
In a reference to the government's policy of promoting lower interest regime to boost private investment, Singh said the strategy would come under 'severe question' as there were strong possibility of inflation outpacing interest rates.
The inflation had been threatening to go beyond 5 per cent, he said.
With reference to budgetary allocation for irrigation projects, Singh said the money earmarked for this was the same as the previous year.
"This shows that there is hardly an application of mind on the issue," he said referring to the government's project of inter-linking rivers.
"Vision without strategy becomes day-dream," Singh said referring to the dwindling growth rate ever since the BJP-led coalition took over.
"Indian economy is performing below its potential," Singh said. The average growth rate hovering around 5 per cent was a matter of 'great disappointment,' he added.
On the declining growth rate in the agriculture, he said it was for the first time in the recent years that the per-capita agriculture output had declined.
The production of foodgrains also turned out to be dismal even though 60 per cent of the country's population survives on the agriculture, the former finance minister said.
