'In a country like India a pure hire and fire
policy is not justified'
Finance Minister Yashwant Sinha was exhausted when he arrived at the dinner he hosted at the Taj Mansingh in Delhi on Thursday night. He had not expected to be in Parliament till half past eight, participating in the debate and the vote to divest the government's stake in Balco.
He has earlier agreed to spend at least 30 minutes on the rediff Budget Chat, from 2115 hours to 2145 hours. His aides wanted to move the Chat to next week, but we insisted the minister take questions from rediff readers the night after the Budget itself. This is what Mr Sinha said:
Cuncolkar : Please let us know whether there is any relief on baggage allowance for NRIs residing in the Middle-East or elsewhere as customs make it difficult for assessment during arrival in India.
Yashwant Sinha, Finance Minister : There are established baggage rules which are quite liberal at the moment. And they govern all passengers including NRIs coming from the Gulf. If there are individual cases of harassment please bring it to my notice.
sumitgupta : Sir, What have you learnt from the unnecessary controversies regarding Balco's divestment?
Yashwant Sinha, Finance Minister : The fact that whatever you do and however right and transparent you are, the Opposition will still criticise you.
shivaprakash : In the present scenario of 8.5% inflation,you have reduced the interest rates.How can you justify this?
Yashwant Sinha, Finance Minister : The interest rate which are calculated are not merely on basis of the interest that is directly paid but also in addition there is a government guarantee on the loans. And there are tax concessions also. Further, the world over interest rates are related to the concept of core inflation and not what is called as headline inflation. If you look at it from that point of view then we will find that the interest rate have been extremely high on these savings in India.
Indian(c) : Sir, will you be able to ensure that Industry in India has a clean and quick exit policy? This is one of the biggest reasons most people do not want to invest in India.
Yashwant Sinha, Finance Minister : I have talked about some reforms in the labour market. But I believe in a country like India a pure hire and fire policy is not justified.
Indian(c) : Sir, when will the RBI become truly independent of the politicians? Will the RBI be able to function with the same degree of independence as the Federal Reserve in the USA? Do you have a timetable for this?
Yashwant Sinha, Finance Minister : I have already said that we will bring in legislation to make the RBI more autonomous. In the meanwhile, I have decided to respect the autonomy of the RBI and give them full freedom in matters within their jurisdiction.
sumitgupta : Sir, has Indian politics grown up to throw away populist measures in place of sensible economics?
Yashwant Sinha, Finance Minister : We are trying to do our best. I believe that good economics is also good politics. And bad economics is certainly not good politics.
Nathan : Sir, my appreciation to you for your friendly Budget, but I think you have skipped software products. Is it right?
Yashwant Sinha, Finance Minister : As far as information technology is generally concerned, I have clearly stated that we are going to implement the ITA (I) schedule by 2003 by which time all duties have to be brought to zero. In pursuance of that I have reduced to 15 per cent duties on a number of products in this Budget.
Yashwant Sinha, Finance Minister : Goodbye everyone: I wish all of you very well.