Date:15/12/2007 URL: http://www.thehindu.com/2007/12/15/stories/2007121562651600.htm

National

Modi regime bungled fiscal affairs: Chidambaram

Manas Dasgupta

AHMEDABAD: Union Finance Minister P. Chidambaram on Friday described the Narendra Modi administration as one of the worst fiscally managed governments in the country, having run up huge debts that would take the next two generations of the State to pay up.

While lauding the Centre’s measures for “inclusive growth,” he castigated the Modi government for “alienating” a large section, injecting a “fear complex” in it and “dividing” society by following a “divisive, sectarian, narrow communal agenda.” It was not good for Gujarat’s future growth, Mr. Chidambaram told journalists here.

Share in taxes

Refuting Mr. Modi’s allegations of discrimination, he claimed that in the last four years since the UPA government came to power, the Centre had given Gujarat Rs. 14,000 crore as its share in Central taxes and about Rs. 10,000 crore towards plan and non-plan expenditure. This was “the highest amount paid to the State by the Centre” for any four-year block since Independence.

Asked about Mr. Modi’s argument that the Centre paid much less to Gujarat than the taxes it collected from the State, Mr. Chidambaram said there was no way of measuring which State contributed how much to the Central kitty. In addition to providing financial assistance, the Centre helped Gujarat with multilateral and bilateral funding, including loans from the Asian Development Bank and the World Bank and water supply projects being implemented by the Netherlands and others.

Accumulated debt

Despite all this, the Modi administration managed its fiscal affairs so badly that the State had run up an accumulated debt burden from Rs. 45,301 crore in 2001 to over Rs. 94,009 crore this year, and earned the dubious distinction of being one of the six “highly indebted States.” The others were West Bengal, Punjab, Rajasthan, Kerala and Maharashtra.

Gujarat spent a mere 31 per cent of the budgetary allocations for the social sector, ignoring the needs of the poor, marginal farmers and the other weaker sections, Mr. Chidambaram said.