Promising to lower taxes and tariffs as part of economic reforms, Finance Minister Jaswant Singh on Saturday rubbished opposition criticism over the high growth figures and said the government will revise upwards the annual GDP growth rate beyond 8.1 per cent for 2003-04.
Neither 'worried nor elated' over the rise in rupee value, Singh has left it to the Reserve Bank of India to deal with the situation.
In an exclusive 45-minute interview to PTI, the finance minister spoke on a wide range of issues like the thrust on reforms if the National Democratic Alliance is voted back to power, inflation and prospects of double-digit economic growth and ruled out tax on farmers.
Appearing exuberant over the Central Statistical Organisation figures of 10.4 per cent growth in the third quarter of the fiscal year that had just ended, Singh said fiscal deficit would also be lower than 4.8 per cent as projected in the interim budget.
Dismissing opposition criticism that the 10.4 growth rate was a jugglery of figures, he said CSO was not an arm of the finance ministry. "It is an old organisation and has done sterling service. We can't start deriding an establishment in the heat and dust of electoral battle."
"I have not juggled with figures. It is not finance ministry's figure," he said appealing to the opposition parties not to equate economic growth with government. They should also take pride in the fact that the economy was growing at a higher rate.
Asked what would be his next budget like, Singh said the reforms would cover areas like fiscal consolidation, management of state finances, continued reform of the financial sector, manufacturing, infrastructure and social sectors.
"We are committed to further rationalising and simplifying taxes and tariffs," he said.
He did not agree with the opposition description of the direct and indirect tax concessions before announcement of elections as 'giveaways.'
"I am astonished with the term they are still being considered as giveaways. I am sharing the revenue with the citizens of India. I am not giving it away," Singh said, adding that the improvement in revenue collections on account of the concessions would be known next week when the figures for the whole year would be available.
The minister said by easing the tax burden, revenue does not suffer. Asked whether this philosophy of lowering tax rates would continue in the next budget, he said: "Yes."
Asserting that inflation would remain 'benign' and that the latest figures showed it had come down to 4.13 per cent, Singh ridiculed suggestions that rupee was being manipulated to keep price levels low.
Praising the Reserve Bank of India for doing an excellent job in the present situation, he said: "Due attention was being paid on the management of exchange rate. We have foreign exchange reserves of $110 billion. Management of reserves (by RBI) was exemplary."
About appreciating rupee, he said: "It is a matter we are paying attention to."
"Neither elation nor despair," he said when asked if the government was worried or happy over hardening of rupee.
Refuting the opposition criticism that the double-digit growth in one quarter (third quarter) would not be representative of the whole year, Singh said the year consists of only four quarters and the peak so far has been achieved in the third quarter.
"I have no doubt that the country is well set on the path of a GDP which will be in excess of eight per cent. Now that we have exceeded 10.4 per cent, in the fourth quarter it has been a good rabi crop and services sector and manufacturing sectors have done well.
"With this, the growth rate projections of 7.5-8.1 per cent will merit a reorientation."
Asked about an estimate of the likely figure, Singh said he did not want to 'speculate' on the figure.
To a question how far the Indian economy was away from a double-digit annual growth rate, Singh said: "It is not a wishful thinking. It is my conviction and I think the country is poised for an explosive growth. I am convinced that the double-digit growth rate is possible in single digit number of years."
With the prospects of high growth rate, Singh said the fiscal situation too would be better than expected. The fiscal deficit figure which was lowered to 4.8 per cent of GDP in the interim budget after revenue buoyancy and expenditure control would now have to be 'revisited' as economy was likely to end the year with a deficit lower than 4.8 per cent.
To the opposition criticism that the average growth rate during the five years of Vajpayee rule was lower than that achieved during the Narasimha Rao regime, Singh said the high growth rate has been achieved despite several adverse conditions.
"We have two stand-offs including Kargil, Gulf War, Afghanistan, three major cyclones, two major earthquakes, worst-ever drought in four decades and hardening oil prices," he said, adding that despite all these adverse situations the economy has grown by 10.4 per cent.
But, Singh said he was happy to note that opposition was complaining that this growth rate was not enough. It augurs well that there is competition for growth.
On the bullish capital market, he said it only reflected the strong fundamentals of the economy. In the last 12-18 months the economy was on the roll and this is being reflected in the capital market as well. Hence, it would not be correct to describe it as a bubble.
Singh maintained that Divestment Minister Arun Shourie's proposal to mop up Rs 100,000 crore (Rs 1,000 billion) every year through sell off of PSUs was 'extremely feasible.'
