Even as it remains unclear whether Piyush Goyal, who has been given charge of the finance ministry, will present an interim budget with a vote on account, or a full-fledged Budget 2019, former finance minister Yashwant Sinha said, "It would be entirely improper and unconstitutional on the part of the Central government to present an Economic Survey and a Finance Bill or introduce any new service".
At an interaction with members of the Indian Women's Press Corps in the capital on Monday, Sinha said it would be a violation of the Constitution of India. Sinha, who was the finance minister twice, besides being a senior BJP leader till he quit the party in April 2018, elaborated that the Constitution in fact does not mention budget, interim budget or vote on account, but only an "annual finance statement of income and expenditure".
"No finance minister so far has presented a finance bill with an interim budget. It will be a violation of conventions if it is done," he said. Sinha referred to the conventions around the Constitution and said they were as important as the written words of the Constitution.
Amid speculations of doubling of the exemption limit of income tax, Sinha went on to warn those who were seeking this and some other benefits, that the government has no authority to amend the direct taxes other than through a finance bill, which it has no authority to introduce.
Indirect taxes, however, could be tweaked by amending them through a notification and later getting parliamentary approval.
The former finance minister said the government can only introduce an appropriation bill, which is a statement of expenditure, and has to be for a full year. Revenue and non-revenue receipts will also be shown for a full year.
"I do not have a problem if the budget speech is the BJP's manifesto, so long as they don't make any allocations for what the finance minister is reading," he said in reply to a question.
In a free-wheeling interaction, Sinha spoke on economy, democracy, politics, and the impact of Priyanka Gandhi on BJP.
Talking about the state of the economy, Sinha's big observation was to do with the statistics. "I don't trust the figures given out by this government any more. It's all been dressed up and changed," he said, giving three examples.
The first one was the change in base year and the formula for calculating GDP in January 2015. While changing base year was fine, the comparative figures of future data was given only for 2013-14, which showed that the GDP in UPA-2's final year was 10.2 per cent, while all the years of the Modi government was around four per cent. This, he said, was hastily withdrawn, and the NITI Aayog tasked with coming up with the correct picture. "They showed this government's GDP as the best ever," remarked Sinha.
Sinha drew his second example from the Standing Committee on Finance in Parliament, and said it asked the agriculture ministry to report the impact of demonetisation on the sector. When the report showed demonetisation and the government in poor light, it directed the ministry to withdraw it and present a fresh one. The new one predictably said farmers were gung-ho about demonetisation.
Sinha referred to the employment figures adduced by the Labour Bureau, as is normally done. "This was not flattering, and started a debate on employment and joblessness. The government asked the Labour Bureau not to do this study, and got sarkari economists to do it. They said they would go with Employment Provident Fund Organisation (EPFO) figures. So, when a unit with 18 employees added two more and came under the EPFO, it was shown as 20 new jobs on the basis of EPF, while in fact only two new jobs were being reported", he elaborated.
The senior leader said it was the first time any government was "directly interfering with the collection of statistics, shooting the messenger and creating a topsy-turvy situation".
Sinha said the agrarian distress of today was unprecedented. While the government had doubled the MSP in some cases, the procuring agencies were only buying a part of the farmers' produce, and leaving them to the mercy of the mandis where the prices had crashed to below half the MSP. The farmers growing cash crops were worst hit, he said.
The issue of NPAs, Sinha said, were not tackled. He quoted a study to say that the years of this government had seen the slowest investment cycle in the last 15 years.
"If we are really the fastest growing large economy in the world with a seven per cent GDP as they claim, you should not have any agrarian distress, jobless growth. So, the economy is in a bad shape".
'Undeclared emergency'
The senior leader also felt that "the institutions of democracy were under severe threat and there was an undeclared emergency". Pointing an accusing finger at the all powerful PMO, he said the cabinet and the cabinet committee on security had ceased to matter.
"The defence minister didn't know of the Rafael issue save from the papers, and the home minister learnt of the withdrawal of support to the Kashmir government from the television. I don't know whether the external affairs minister is involved with foreign policy; she never travels abroad with the prime minister. Neither the finance minister nor the chief economic adviser knew about demonetisation until they heard the prime minister on national television," he elaborated, also mentioning the appointments of judges, the RBI and the CBI. "Bureaucrats don't look up to their ministers, but only to the PM"
Sinha described as 'improper" minister Arun Jaitely's blog chiding the CBI for "investigative adventurism", particularly since the case pertained to the finance ministry. "Every minister can behave like this".
