Palaniappan Chidambaram presented five Budgets - two under the United Front government and three under the UPA regime.
Yashwant Sinha also presented five Budgets under two different governments but with Atal Bihari Vajpayee as the prime minister of both of them. And Jaswant Singh presented only one Budget - excluding his interim Budget in 2004 before the elections.
What do these 16 Budgets tell us about the four finance ministers? They were all more or less committed to reforms and to the need for rationalising as well as reducing tax rates.
Where they differed from each other was in their ability to implement the proposals they themselves mooted to reduce the fiscal deficit and to control expenditure on subsidies.
Jaswant Singh and Yashwant Sinha were guilty of even having proposed a higher fiscal deficit target than what the preceding Budget had projected. Singh did this in his only Budget in 2003-04, but he made up for this by turning in a better performance by reducing the actual fiscal deficit to 4.5 per cent of GDP, 1.1 percentage points lower than what he had projected at the time of presenting the Budget.
Sinha, on the other hand, proposed a higher fiscal deficit on three occasions compared to what was projected in the preceding Budget - in 1998-99, 2000-01 and 2001-02. Worse, with the sole exception of 1998-99, when his actual fiscal deficit turned out to be lower than the projected figure, Sinha exceeded his fiscal deficit projections in all his other four Budgets.
In his first three Budgets, Manmohan Singh also could not adhere to the fiscal deficit target that he had proposed. In fact, after falling from 8.4 per cent of GDP in 1990-91 to 5.9 per cent and 5.7 per cent in 1991-92 and 1992-93, respectively, the government's actual fiscal deficit rose to 6.3 per cent in 1993-94. Manmohan Singh's last two Budgets brought the government back on the path of fiscal correction.
Against a projection of 6 per cent fiscal deficit in 1994-95, the actual deficit turned out to be 4.6 per cent of GDP. In 1995-96 also, the actual fiscal deficit was 4.1 per cent against the projection of 5.5 per cent of GDP.
Chidambaram's record shows that he stayed firmly on the path of fiscal correction - in his intent as well as in his actions. In none of his five Budgets, did he ever propose a fiscal deficit target that was higher than the preceding one.
Except one Budget in 1997-98 (where the actual fiscal deficit at 4.7 per cent of GDP was more than the projected 4.5 per cent), Chidambaram has always managed to end the year with a lower fiscal deficit figure than what he projected. This, of course, assumes that he will stay below the projected fiscal deficit figure of 3.8 per cent of GDP in 2006-07 as well.
Chidambaram's only aberration was in respect of subsidy reduction when he was the finance minister in the United Front government. He was responsible for having allowed subsidies expenditure to rise by 22 per cent in 1996-97 and then again by 13 per cent in 1997-98.
Yashwant Sinha, of course, excelled him, by raising the subsidy bill by 27 per cent in 1998-99. Sinha controlled the subsidies growth in the following year to 4 per cent. But again in 2000-01, 2001-02 and in 2002-03, subsidies grew by 9.6 per cent, 16 per cent and 39 per cent, respectively.
In sharp contrast, Manmohan Singh, like Jaswant Singh, maintained a tight control over the subsidies bill -allowing that to grow by over 5 per cent only once and keeping that below 3 per cent in the remaining years. In fact, in 1992-93, subsidies expenditure fell by 2 per cent.
To be fair to Chidambaram, he has made amends for his excesses on the subsidies front, after he returned as finance minister under the UPA regime. The subsidies expenditure fell by 1.5 per cent in 2004-05 and grew by only 7 per cent in 2005-06. It is projected to fall by 1.4 per cent again in 2006-07. Whether that really happens will, of course, be known on February 28, 2007.
