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Raghav: The opportunity is understandable, you could have given a set off for exports but here the Finance Ministry is introducing a differential taxation consciously in a segment, which is bound to distort domestic demand?

Chidambaram: No, it is bound to encourage people to buy small cars and allow them to graduate from two-wheelers to small cars. In some countries, the tax on cars is levied on the amount of space it occupies. A small car in a country like India means less pollution, less space. I think taxation can be used to actively encourage forward-looking policy.

Raghav: Which is what I am saying Finance Ministry now deciding for what the consumer?

Chidambaram: Nothing wrong with that because when we come to an industry where we have a huge option.

Raghav: As long as you conceive that Finance Ministry is doing strategic allocation of resources for consumers?

Chidambaram: Just nods his head.

Raghav: Directed lending of 7% for farmers. This is good old days of directed lending. Banks you will lend?

Chidambaram: You represent, your medium represents urban English speaking middle and upper middle class. Let me say this with the greatest respect. This is not all of India.

Raghav: Are you recognising it as an explicit subsidy on your books?

Chidambaram: I have said so in my speech that I will give a subvention. I have not hidden it. I have said so. I will request them to lend and that requires a subvention. I will give it on my Budget.

Raghav: Of the entire amount, you have kept about Rs thousand crore I believe away for that?

Chidambaram: No. We have not even worked out the subvention because the details will be announced shortly.

Raghav: Therefore if there is a subsidy?

Chidambaram: It will be on the Budget.

Raghav: As long as you are giving us that assurance then fine?

Chidambaram: It is there in the speech. Absolutely it will be there on the Budget.

Raghav: You overturned about four Supreme Court judgments on taxes. By legislative fiat this time and we remembered the celebrated ITC case last year, where you brought in an ordinance to actually overturn a Supreme Court judgment?