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Chidambaram hits out at critics, says have pulled back economy

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Hitting out at critics of UPA’s management of economy, Finance Minister P Chidambaram Tuesday said the government has “pulled back” the economy from a difficult situation and put it back on a high growth path.

Rejecting description of his interim Budget as populist, he said over the last couple of years the government was trying to do a “rescue act” like every other government in the world was doing.

“To put it plainly, over the last couple of years we are trying to do a rescue act like every other government in the world is doing. I am at pains to emphasise that we are not alone.

“Every Finance Minister says that he is engaged in a rescue act. Therefore what I did in 2013 Budget and what I have proposed in the 2014 interim Budget must be seen as part of getting back growth when the economy in the world is fragile and I think we have succeeded in a fair measure,” Chidambaram told PTI in an exclusive interview here.

He said the economy has “clawed back” to 4.4 percent in Q1, 4.8 percent in Q2 and going by the CSO’s estimate a minimum of 5.2 percent in Q3 and Q4 taken together for the half year is likely.

“Very few countries have been able to do this over the last 18 months. Therefore while I am not entirely pleased with what we have been able to achieve, I must emphasise that we have achieved our goals in fair measure and going forward if the governments follow the 10-point agenda that I have laid down towards the end of my speech, we will get back to the high growth path,” he said when asked how he would define his Budget.

When told that his critics would say the problems in India are not only due to international situation, he said, “I did not say that either. But the problems in India and the problems in every country of the world are largely due to the international situation.”

He acknowledged that in the past some mistakes had been made.

Asked what they were, Chidambaram referred to economist T N Srinivasan who had written a monograph which said the first stimulus package was perhaps necessary, but deeper analysis may have shown that the second and third stimulus packages were not necessary.

“But that is a judgement he makes in hindsight. Given the circumstances then, given the data available then, a decision was taken to have three stimulus packages in succession.

“There were clearly benefits out of the 3 packages. The growth rate was above 8 percent. But the downside was that the fiscal deficit limits were breached and inflation went almost out of control. In hindsight some things are clear. But what human beings don’t have is luxury of hindsight,” he said.

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