THE
HARD part of Manmohanomics may be upon us.
Analysts feel that World Bank pressure to
rein in the fiscal deficit has forced the Centre to resort
to ad hoc price hikes, despite the unpopularity of such measures.
As per the understanding with the Washington
based multilateral finance body, India must maintain a fiscal
deficit ratio of 4.5 per cent Gross Domestic Product for the
year ending March 1994
However, rough estimates reveal that Finance
Minister Manmohan Singh will find it extremely difficult to
meet this requirement as the figure is expected to be in the
region of 6 to 6.5 per cent.
"The recent spate of price hikes for
cooking gas, sugar, wheat, rice, petrol and diesel show that
the finance ministry has no accounting sense," said Assocham
secretary general Raghuraman
"Such ad hoc hikes demonstrate that
North Block's calculations unveiled in the last budget have
gone haywire."
According to Manushi Roy, senior director
of the Confederation of Indian Industries, the unexpected
|
revenue
shortfall and the growing budgetary gap is forcing the government
to look for avenues to bridge it.
Indian Institute of Finance director
J.D. Agarwal blamed industry for the revenue shortfall.
"If the demand for goods has
not picked up, it is the fault of the industry which has failed
to pass on excise concessions announced in the last budget
to the consumer. Improved sales would have meant larger revenue
collection," he said.
The World Bank had suggested that the government
should not adopt measures that may hurt the poor. But New
Delhi has hiked rice and wheat prices, claiming it was done
to provide remunerative prices to farmers.
But, as an economist pointed out: "Such
desperate measures show poor finance management." |
