New Delhi: Finance minister P. Chidambaram is fast running out of friends and admirers across the political spectrum, as he gets set to present Budget 2007-08 on February 28. The runaway rise in prices of essential commodities has taken the sheen off the 9%-plus GDP growth rate under his watch. Increasing political heat over this raging issue indicates that this year’s Budget will be judged mainly on the finance minister’s intent as much as concrete proposals to cool down prices.
The Opposition parties merrily latched onto the price issue in the recently concluded elections in Punjab, Uttarakhand and Manipur. Now that dates have been announced for the Uttar Pradesh polls, too, which begin April 7, the government has too much at stake and precious little time.
Voices of discontent are growing impatiently loud and clear even within Chidambaram’s party, as demonstrated at the Congress Working Committee meeting earlier this week.
Under fire from his own party at the CWC meeting, with Congress president Sonia Gandhi and Prime Minister Manmohan Singh in attendance, Chidambaram apparently promised to bring down prices of essential commodities within two weeks.
The criticism from within the party only adds to the displeasure recorded by other constituents of the ruling UPA coalition, including Sharad Pawar’s NCP and the Lalu Prasad-led RJD. It also lends credence to the almost daily dose of diatribe dished out by the Left parties, which are supporting the government from outside, and the Opposition including the leader BJP.
In the run-up to the budget, then, the FM cuts a strangely solitary figure as he courts triumph and trial at the same time. In a classic Dickensian paradox, it’s the best of times for Chidambaram as he couldn’t conceivably ask for better numbers to play around with for his annual financial accounting exercise. With spectacular GDP growth and tax collections swelling to a record, the finance minister has much to gloat over. Yet, it’s also the worst of times for him as he faces his toughest political test as finance minister of the UPA government. It seems more than anyone else, including the PM, he has to answer for letting down the Congress’ aam aadmi plank.
“The Congress slogan, Congress ka haath aam aadmi ke saath (Congress’ hand with the common man), now really means Congress ka haath, aam aadmi saaf (Congress’ hand to wipe out the common man),” said Rajiv Pratap Rudy, a BJP spokesperson, and took another dig at the government. “This is miserable performance, coming from a government led by an economist and a finance minister who thinks he is no less.”
The Left parties are doing their best to distance themselves from the government’s economic policy. This became evident when the CPI(M), the principal constituent of the Left Front, refused to support the government over sacking the Mulayam Singh government in UP. Even as it continued to voice its political differences, it was over the price rise that the party said it would organize a nationwide agitation, on February 23. “The GDP growth is meaningless if it does not bring any cheer to the common man,” said A.B. Bardhan, general secretary, CPI.
Fortunately for the finance minister, not all contentious issues need figure in the Budget. The controversy on SEZs, the furore over FDI in retail and disinvestment can all wait.
If the finance minister is seen as doing enough to contain the price rise, and to boost agricultural growth which impacts the majority of the country’s working population, he may yet emerge unscathed from his third budget for the United Progressive Alliance.
Agriculture follows price rise as the most important political issue in the run-up to the Budget. Followed, at some distance, by the pressure to ease the tax burden on the salaried class. Political consensus doesn’t stretch much farther than these issues, leaving the FM with perhaps only the growing services sector to target for additional revenues.