New Delhi: Former Finance Minister P. Chidambaram claimed that the lack of clarity in the policy objective indicates that the government is "confused" regarding what to do with Air India.
"It is neither privatisation nor a joint venture arrangement. There is no clarity in the government's policy objective. In this case, you cannot succeed in selling 70 percent or any stake in Air India. Obviously, the government is very confused as to how to go about it," he said at a press conference here.
Chidambaram further alleged that the Banks Board Bureau (BBB), which has been constituted to improve the health of the banking sector, is an "utter failure."
"I would like to give the BBB a DDD rating (negative rating). Gross NPAs have risen in the last four years from Rs 2, 63,000 crores to Rs 10, 30,000 crores and will rise more. No bank is willing to lend a big-ticket loan. Credit growth to the industry in the last four years was 5.6, 2.7, -1.9 and 0.7 percent. They (BBB) have failed in improving the health of the banking system. I had no expectations of them succeeding. I think the BBB should be quietly buried," he said.
Responding to a question on the global economy's impact on India, Chidambaram downplayed the same and said the country is being affected by policy blunders, reckless decisions and administrative incompetence, and not by global factors. The senior Congress Party leader also lashed out at the Bharatiya Janata Party (BJP)-led Centre over rising inflation prices.
"Inflation is on the rise. Inflation expectations are high. No more proof is necessary than the hike in the repo rate a few days ago. Interest rates will rise, throwing more burden on consumers and producers," he said.
Chidambaram also termed the Centre's concept of minimum support price (MSP) as another 'jumla'.
"Farmers' despondency has turned into anger and farmers have come to the streets to protest. The principal reasons are uneconomic prices for farm produce and stagnant wages of farm labour. For the few crops that have an MSP, the MSP is not adequate and the annual increases have been niggardly. Every farmer knows that the promise of MSP = Cost + 50 percent, is a jumla," he said.
Against the backdrop of an increase in currency circulation, Chidambaram said the actual currency needs in the economy need to be decided by the Reserve Bank of India (RBI), and not the central government.
"The rule of thumb is that currency in circulation should grow at par with the nominal gross domestic product (GDP). However, this isn't the case. While I'm all for digitisation in terms of transactions of higher values, the Centre cannot restrict currency availability for common man's daily needs. It is not the Centre's prerogative to decide how much currency is required; that decision is of the RBI," he added.
