Vantage point

Monday, May 24, 2004

Fiscal Deficit!!!

Wiser counsels prevailed and Manmohan did not waste the talents of P Chidambaram by retaining the Finance portfolio.

In his first press conference, PC has said that fiscal deficit is an area of concern. That is heartening to hear, but it will be interesting to see how he manages to cut the fiscal deficit by slowing down disinvestment. The left parties want "assistance" to be given to ailing PSUs. As if 55 years of assistance is not enough.

He has also talked about public investment. Balancing public investment, not disinvesting profit-making PSUs, with reducing fiscal deficit is going to be very tough.

Either PC will manage the left somehow and continue with aggressive reforms, especially on the disinvestment front. Or he will end FY05 with a a deficit of over 5%. I do not see a middle path.

p.s- A few days back Jairam Ramesh was a shoe-in for the post of Planning Commission Dy. Chairman, which I considered a good news, having read an appreciated his views in the media over the past few years. Now I hear someone else might get the job because of pressure from the left. Arrrrrrgggggh Left!

p.p.s- Good news! Arjun Singh, the new HRD Minister is in favour of giving IIMs more autonomy. :) Yay!!