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FM's googly stumped many in North Block
BS Bureau in New Delhi |
January 12, 2004 08:04 IST
Last Updated: January 12, 2004 12:06 IST
On Friday evening, some finance ministry officials were seeking details of Jaswant Singh's mini-Budget unveiled in two instalments beginning Thursday. This sums up the secrecy over the two-day carpet bombing of announcements on January 8-9.
The huge Rs 110,000 crore (Rs 1,100 billion) investment plan was crafted by Singh more in consultation with his party colleagues, including Prime Minister Atal Bihari Vajpayee, Deputy Prime Minister LK Advani and BJP President Venkaiah Naidu, than with his core team in North Block. The team was roped in much later only to draw up the fine print and put across an attractive pre-poll package.
While the revenue department was asked to work out the details of Thursday's customs and excise duty cuts that gave away Rs 10,000 crore (Rs 100 billion), the officials were unaware of the timing of the announcement.
When contacted, even top executives of financial institutions and banks said they were clueless about the plethora of funds that Singh promised to address his "paanch" priorities.
This is a far cry from the consultations the banking division held with nationalised bank chiefs before Singh reduced the interest rate on farm credit up to Rs 50,000 to 9 per cent last year.
Even the new external commercial borrowing policy put in place in December preceded elaborate parleys between the finance ministry and the Reserve Bank of India. But this time round, Singh took advantage of RBI Governor Y V Reddy's presence in the Capital on January 7 to discuss with the central bank the proposed relaxations.
The RBI is known to be opposed to any further relaxation of the external commercial borrowing guidelines in view of the $100 billion-plus foreign exchange reserves.
In fact, on credit to the small scale industry, the banking division had only on December 19, opposed a proposal to cut the interest rate. But politics prevailed once Minister for Small Scale Industry CP Thakur approached the prime minister. Following this, Singh more than pleased the sector by offering more than what Thakur sought.
The jury is still out on who actually helped the finance minister in springing the surprise.
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