PC gets Budget hangover on oil pool

BUDGET 2006: FM discusses about taxes and the GDP growth.

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Keywords: Interview, Post-budget, Chidambaram, Specials

Chidambaram: And we entered into an agreement with ITC. We collected the money.

Raghav: You can’t fight big government? Who can fight big government if a big government decides to become so interventionist?

Chidambaram: There the judgment proceeded on an interpretation of a particular rule or a notification and the judgment said that if this has been differently worded the result would have been different. So we were entitled to clarify that our intention was to collect that money. That is the whole theory of validating legislation. The earliest judgment of the Supreme Court in validating legislation goes back to the 1950s. That any number of Supreme Court judgments, which has upheld the right of Parliament to pass validating legislations.

Raghav: There are four cases; there is TEGA India, Technoweld.

Chidambaram: These are all simple procedural things were we have to correct it and in many of the cases they are to confirm the relief granted rather to take away something.

Raghav: Disinvestment, you just seem to have forgotten about the word.

Chidambaram: You have not read all the Budget papers. The number is there. It is Rs 3840 crore. Two companies have been approved. We have taken it into the receipt side. We have passed it through the Budget papers to the national investment fund. It does not affect my fiscal deficit.

Raghav: But isn’t it a modest target?

Chidambaram: Only two have been approved so far. As and when more are approved we will take it and pass it through.

Raghav: There are several creative ways of doing this disinvestment and you would know them as well. If you were to have a situation where BSNL were to buy MTNL and BSNL does an IPO. That is fully compliant with the CMP.

Chidambaram: That was what the NDA did cross holding and buying cross holding and I criticise them for that. The disinvestments that we are talking about is, disinvestments of small portions of equity in profit making non-navratnas. That is, the government monetises a part of its equity and reaps the capital gains values.

Raghav: So those are the two companies?