Finance minister P Chidambaram has been facing fierce criticism for turning budget 2008-09 into a political (‘election year’) exercise. In an exclusive interview with Kandula Subramaniam, the Harvard Business School alumnus tries to explain some of the economics behind his controversial decisions. Excerpts:

• Much of the discussion around your budget has been on the farm waiver package, tax cuts and Pay Commission. But every budget has a broad direction for the economy. What is the big picture story in this budget?

That the growth story is intact, that the growth story has to become more inclusive. The India story cannot have just a few characters, it must have many more characters... the scheduled castes, scheduled tribes, women, minorities, farmers, school leaving children who have to be imparted skills. The message we are sending out is that this government is committed to more inclusive growth.

• You say the growth story is intact, but recent GDP growth numbers show that seven out of eight sectors have suffered a slowdown.

Correct

• Do you think this is a worrying sign?

That is why, anticipating a slowdown in some manufacturing sectors, we have take steps to give a fiscal boost. We have cut customs duties, we have cut excise duties, we have made deeper cuts in some sectors, we have left more money in the taxpayers’ pocket. We hope all this will boost demand.

• So what you are saying is that there will be consumption-led growth?

... contd.