YSRCP: Country being misled by Chidambaram

Hyderabad, Feb 17, 2014: YSR Congress Party on
Monday accused the Union Finance Minister P.Chidambaram of misleading the
country with
his false claims that the Fiscal Deficit for the current year (2013-14) will
come down to 4.6% of GDP from the budgeted 4.8%.

Addressing media persons here, Party PAC member DA
Somayajulu said that in a Vote on Account Budget, no major policy initiatives
are expected. “What is however shocking is the way the Finance Minister tried
to mislead the Country by claiming that the Fiscal Deficit for the current year
(2013-14) will come down to 4.6% of GDP from the budgeted 4.8% . Similarly, he
claimed that there will be no change from the budgeted revenue deficit to GDP
ratio of 3.3% for 2013-14,” he remarked.

Both these claims are absolutely wrong, he said, adding
that the Union Finance Ministry hosts every month on their website Monthly
Economic Report and similarly the Central Statistical Organization periodically
updates the GDP figures.

“As per FRBM Rules, 2004 GDP means GDP at current
prices. As per the advance estimates released by CSO on 7th February 2014, the
estimate for GDP at current prices for 2013-14 is Rs 105.4 crores,” he said.

As per the latest Monthly Economic Report, which
covers the actual receipts and payments of the Union Government for the period
April-November (2013-14), actual revenue deficit for the eight months period
ending on 30th November, 2013 was Rs. 3,93,019 crores, as against the budgeted
revenue deficit of Rs. 3,79,838 crores for the whole year, which means that the
revenue deficit at the end of eight month’s period overshot the whole year’s
budgeted figure, said Somayajulu.

“At this rate, even on a conservative basis, the actual
revenue deficit at the end of the current fiscal will be minimum Rs. 5 lakh
crores, which means a revenue deficit of 4.76% of GDP for current fiscal
2013-14. How could the FM claim that the revenue deficit will be just 3.3% for
2013-14? “he asked.

Similarly, as against the budgeted fiscal deficit of
Rs. 5.42 lakh crores for the whole of 2013-14, the actual fiscal deficit for
the first eight months of the current fiscal amounted to Rs. 5.09 lakh crores,
he said. “At this rate, even on a conservative basis, the fiscal deficit for
the current fiscal will not be less than Rs. 6.5 lakh crores, which means a
fiscal deficit of 6.2% contrary to what the Finance Minister claims to be
4.6%.  In the light of these facts, it is
surprising as to how the Finance Minister tried to cover up the truth and tried
to take credit that the fiscal consolidation of the Union Government is on
track. Either the figures published in Monthly Economic Report and CSO are
wrong or those claimed by Finance Minister are wrong. This should be clarified,”
Somayajulu demanded.

Another matter of great concern is the growing
dependence of Union Government on borrowings for meeting the ever mounting
revenue deficit. The interest payments as percentage of revenue receipts for
the FY 2012-13 were as high as 36%. When it comes to the current fiscal, for
the first eight months ending on 3o November 2013, the interest payments
accounted for 40% of the revenues. The interest payments were Rs 2,14,434
crores as against the revenue receipts of Rs 5,02,691 crores. This is highly
disturbing to say the least.

Although the Finance Minister laboured to reject the
criticism that the economy of the country suffered reversals mainly on account
of policy paralysis of the Union Government, the fact remains that there has
been both policy and action paralysis leading to GDP growth rate falling to an
estimated 4.9% for the current fiscal from a high of 9.3% for FY2010-11.

Overall, the country suffered heavily on account of
complete mismanagement of the economy by the UPA2 Government. The sooner it
exits, it is better for the people of the country, he said.





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