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'Life of aam aadmi much worse today'

February 22, 2008 17:44 IST

Yashwant Sinha, former finance minister of India, has been there, done that. He knows exactly how Finance Minister P Chidambaram will feel when he presents the Budget for 2008-09 on February 29.

Yashwant Sinha held the post of finance minister from March 1998 to July 2002. So what does his Bharatiya Janata Party think about Chidambaram's plans for the country? What does Sinha think should the finance minister must do to boost a flagging economy and to make the common man happy?

What are his expectations from this year's Budget? What does he think of the UPA's economic policies? What can Chidambaram do to make you -- and him -- happy? What would Sinha himself do if he were the finance minister?

In an hour-long chat on rediff.com on Thursday, former finance minister replied to many such readers' queries. Here is the transcript:

Yashwant Sinha,former finance minister says, 
I am here to take your questions

Hajare_sidhu asked, Hi Sir, Will there be any major decisions that are going to be taken in the coming budget to help the state of the farmers in the country?
Yashwant Sinha answers,  at 2008-02-21 17:21:41Rural distress has been a major problem of our economy. A package for the farmers is ,therefore, unavoidable. Farmers suicides must be prevented at all cost. And, all steps which are necessary including loan remission should be taken in the budget.
Chidambaram asked, currently the real estate is booming like anything and ordinary person cant survive or even dream abt home..so are there any chances for real estate to go down
Yashwant Sinha answers, There is a genereal boom .All asset prices including real estate price has climbed up.This is on account of rising demand and limited supply.The way out is to increase the supply by facilitating construction which has actually slowed down.EMIs have gone up putting pressure on the middle class. You should bring down interest rate by controlling inflation. Artificial reduction in interest rates will be temporary and unsustainable.
andy asked, Sir any chance of reduction of taxes on salary?? the common salaried man is always burdened
Yashwant Sinha answers, Personal income tax collections have gone up.There is room therefore concessions here.for instance the exemption limit could be raised to from rs. 1.10 to 1.50 lakh and the slabs could be made more reasonable.I had raised the exemption limits in my very first budget. But, i was not lucky enough to have this kind of tax collections.
ANILK asked, Do you think Increasing Tax Slab (from 1.10 to 125 or more) is the better option that increasing the investment limit from 1,00,000 from an individual perspective?
Yashwant Sinha answers, I think increasing the exemption limit is a better option than the increasing the investment limit.For the simple reason that those who are not able to save can also be benifited.
krish_999 asked, Your Humble opinion about India as Economic Power?
Yashwant Sinha answers, India is definitely growing economic power.But, we are facign real challenges.The gorwth rate should be maintained at the same timeits benifits should be more widespread. If the benifits are confined to a few than the gorwth rate will not be sustainable. We must get out of the image of being a poor country by bringing those below the poverty line aboove it in the shortest possible time.
harish217 asked, Any prediction on stock market after the budget
Yashwant Sinha answers, This year's budget will be election-oriented.And, will try and please all.It is likely therefore, that stock markets will also respond positively. It is likely to appeal to middle class,also.
kpnt asked, Mr. sinha what are the major changes which a common man can expect in this budjet. is this going to help the poor ??
Yashwant Sinha answers, There are already indications that budget will contain farmers loan remission scheme, larger allocation for agriculture, health and education and, may be employment generation. All these will add to the fiscal burden of the government.But, considering that this is the election year we may expect such a move.
Siraj asked, Whats your view on our current growth ?Is ita reality? Stock market is loosing grip and small time investorys has lost hard earned money ? FM was sleeping ..any coments?
Yashwant Sinha answers, The ups and downs in the stock market are completely unrelated to the developments in the economy. This confirms the fear that manipulators and speculators have taken over the market. And, the regulators and the government have turned blind eye. Small invesotrs need to be very,very careful. And, stay invested in the market.
amit08jain29123@rediffmail.com asked, USA heading towards recession ,what will be impact on indian economy.
Yashwant Sinha answers, I feel that in view of the outstanding gorwth in personal income tax collections the salaried employees should receive concessions in this year's budget.Like raising the exemption limit and the tax slabs.
amit08jain29123@rediffmail.com asked, USA heading towards recession ,what will be impact on indian economy.
Yashwant Sinha answers, The US recession is already having an impact on Indian economy.Our textiles export have declined. IT has been affected.large lay-offs are already occuring in export-oriented industries. It is idle therefore to claim that US recession will not have any impact on Indian economy. We must therefore better manage foreign fund inflow so that rupee remians stable against the dolalr and is now allowed to appreciate further.We should sterilise foreign fund flows and pemit their use against Forex requirements of Indian Corporates. Concessional loans from our reserves should be made available to exporters and those who want to make investment abroad.
bharat.bk asked, sir india has capacity to beat china in terms of economic growth
Yashwant Sinha answers, First, the Chinese model is not the ideal model for India to follow. Our gorwth under democratic set-up is far more sustainable than China's. Many things that happen in China like deaths in coal mines accidents will not be acceptable in any democratic society. We also, have to be careful about unbalanced development.I have no doubt in my mind that we shall catch up with China sooner than later.
Tushar asked, Hello Sir, Just like railway budget dont you think we should have Road infrastructure budget separately. Goods roads are still lacking in our metros & semi- metros cities. Road development is still not taken seriously in our country post independence.
Yashwant Sinha answers, The NDA government under shri Vajapyee was the first government which took up roads construction seriously. It included all roads. National high ways, State roads and rural roads. Those of us who have suffered traveling even on such roads as Grand Trunk road are happy traveling now. City roads also started improving . It is pity that this work has been neglected by the present government and we have failed to even complete the construction of Golden Quadrilateral. I agree that infrastructure in our country is a shame and also a crying need. Small third world countries have surpassed us when it comes to roads, airports and ports.Money is not a constraint. We need will power. You may recall that when Mr. Vajpayee announced the national highway programme and cost of it was estimated to be rs.54000 crore much fun was made of him for indulging in mungerilal ke haseen sapne. But, we got the money , we got the equipment and get going. Today, nobody even remembers that it was descibed as haseen sapne.
avigaur asked, Sir, So much of Education Cess but no spending by the Govt. on education.
Yashwant Sinha answers, Education has been the weakest spot of this government. We have human resources development minister who is only interested in politcs and not education.Large sums of money collected through education cess remain unutilised both with the Centre and State governments. The kind of implementation which was needed is absent.Government of India must stregthened supervisory role as far as education and specially primary education is concerned.
raylisa asked, sir,when bjp govt was in center there was slogan of india shining & current govt slogan aam admi but both the govt in practical failed to reach the common man.What is the reason for the failure.pls advise.
Yashwant Sinha answers, India shining was unfortunately a vulnerable slogan which could be easily punctured and it was! Becasue , India was not shining for everyone.But, we can say with some pride that there was no darkness either .Today under UPA government with rural distress, farmers suicides ,price rise, non-availbility of cooking gas cylinders and high-interest rates the life of aam aadmi is much worse than it was under the NDA regime. And if all that is not bad enough we have the Blue line buses in New Delhi which are killing people with the tragic regularity and government just watches on.
Yashwant Sinha says, Friends, I would like to take leave. It was nice talking to you. Before saying good bye i would say that this year's budget may be a please-all budget. May be, packages and some tax concessions but we have to be careful. Because short term gains often result in long term loss. Every budget proposal therefore must be carefully evaluated and people should not be impressed by any last minute bonanza after suffering for four years. I hope the people of India will exercise their judgement judiciously. Mr.Chidambaram, does not need my advise or anyone else's because he is the only know-all finance minister that India has had. THe is a part of the dream team of India's economic managers along with Prime Minister Manmohan Singh and Deputy chair person of Planning Commssion Montek Singh Ahluwalia. This dream team has given us a nightmare for the last four years. And, this year will be no diffrent. This definitely will be the last budget of the dream team because by next time this year they will be dreaming but outside of the offices they are occupying at present.