Ball rolls from finance to political court




K.P. NAYAR

Washington, April 22: Finance minister Pranab Mukherjee today practically washed his hands off the moratorium demand made by Bengal chief minister Mamata Banerjee.

Wrapping up his visit to Washington for the spring meetings of the World Bank and the International Monetary Fund, Mukherjee said an institutional process was already under way to deal with Mamata’s demand.

But now she will meet Prime Minister Manmohan Singh on May 4, the finance minister said, indicating that the outcome will be a political decision and not a fiscal one which would mean the ball has left Mukherjee’s court.

“After she meets the Prime Minister, it would be known what is in her scheme of things. Then we would have to see. It is difficult to say” anything else right now, Mukherjee said.

The finance minister’s spokesperson, D.S. Malik, had requested reporters ahead of the media conference to confine their questions to issues surrounding the World Bank Group’s Washington meetings.

But Mukherjee made an exception and answered questions about the chief minister’s ultimatum, suggesting that he had taken a serious view of Mamata’s decision to escalate a matter that was hitherto in the domain of the finance ministry.

Mukherjee acknowledged that Bengal had a genuine problem which demanded consideration. “There are certain debt-stressed states which have been identified by the 13th Finance Commission: West Bengal, Kerala and Punjab,” he iterated, recalling that his budget speech this year had also acknowledged this.

Mukherjee said he had set up a committee headed by the expenditure secretary in his ministry to look into this problem for Bengal and the other two states. “I had asked the expenditure secretary to look precisely into the chief minister’s demand and make necessary recommendations.”

The larger issues concerning the state’s finances will be considered, meanwhile, by the Finance Commission.

Mukherjee’s otherwise successful five-day visit to the US was marred by comments by his chief economic adviser Kaushik Basu, which added to the finance minister’s burden of having to defend the UPA government here against an already widespread perception of inaction and indecision on economic reforms and other issues.

Mukherjee rolled out a list of reform measures that had been taken by the government, including easier access to commercial borrowings, creation of an infrastructure debt fund and a progressive manufacturing policy.

But Basu had done the damage with statements appearing to contradict his minister’s assertions. Belatedly, the chief economic adviser made an effort to go back on his pronouncements here but the effort lacked conviction and produced little by way of damage control.

At the same time, Mukherjee contended that the people of India were for more economic reforms. The Congress, he asserted, was a pioneer in instituting reforms and its strength in Parliament had been augmented in elections, including the last polls to the Lok Sabha.