Friday, Mar 29th 2024
Trending News

Arun Jaitley hints at tough days ahead, says need to check 'mindless populism'

By FnF Correspondent | PUBLISHED: 02, Jul 2014, 10:41 am IST | UPDATED: 02, Jul 2014, 10:49 am IST

Arun Jaitley hints at tough days ahead, says need to check 'mindless populism' New Delhi: Ahead of the Budget, Finance Minister Arun Jaitley has hinted at tough days ahead. He has said that there is a need to decide if India needs fiscal discipline or mindless spending.

"Does India need a certain amount of fiscal discipline at this time? Do we need prudence? Or do we need some mindless spending and populism," Jaitley asked.

"You have growth which has slowed down. We have a high fiscal deficit. We have a rate of inflation which in comparison to the last two years has somewhat come down but still is beyond the acceptable limit. Our challenges are compounded. We have an uncertain monsoon. The impact of Iraq on the oil prices adds to the challenges," he added.

India's wholesale price inflation hit a five-month high of 6.01 per cent in May, underscoring the challenges faced the new government, whose Prime Minister Narendra Modi has warned he will administer "bitter medicine" to revive the ailing economy. Food price inflation is near double-digits, with a late monsoon pushing up the cost of vegetables and dairy products. The government has also raised railway fares and fuel prices as crude oil prices have risen on international markets.

Jaitley said populist policies and paralysis in policy-making had slowed growth, and that an improving current account deficit position in the last few months was the only "silver lining" for the Indian economy.

Private economists expect the budget to shift the policy focus from consumption to investment, and address the issue of fiscal imbalances. Jaitley said Indians would have to pay higher prices for better services as any rise in taxation would hurt growth by taking money from the hands of consumers.

"If you indulge in mindless populism, you burden the exchequer. You expect the finance minister to impose higher taxes," he said. "It does not work."
You Might also Like