Chidambaram-Montek Singing Different Tunes

It seems that all is not well between the Finance Ministry and the Planning Commission as Deputy Chairman Montek Singh Ahluwalia has said that he was keen on getting more money for the 11th Plan rather than belt-tightening to meet fiscal deficit targets.

The Finance Minister P Chidambaram is reportedly not in favour of shifting goalposts of FRBM (Fiscal Responsibility and Budget Management Act) to provide more resources for the 11th Plan as suggested by the Commission. On August 14, Chidambaram wrote to Ahluwalia questioning the fundamental assumptions of the approach to the 11th Five-Year Plan.

In the letter, the finance minister has said that his ministry does not accept the Plan Panel’s view that the burgeoning current account deficit will hinder economic growth and questioned the logic that poor demand will inhibit farm growth.