A balanced Budget is need of the hour: Yashwant Sinha

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He has been there and done that. Former Finance Minister and Senior BJP leader, Yashwant Sinha holds the distinction of having presented 5 Union Budgets under the National Democratic Alliance.

In an interview with CNBC-TV18, Sinha called for a balanced Budget, and says the recovery is not strong yet as global markets are still uncertain. He feels 2009 will go down in history as the year in which the government failed to control inflation. "We expect the government to tackle food inflation in the upcoming Budget."

The party, he says, will be happy if the government moves towards fiscal consolidation. "We are concerned about the fiscal deficit."

Speaking on the government's much hyped and talked about National Rural Employment Guarantee Scheme, the former Finance Minister of India says the scheme should not be the driving force for recovery. "NREGS is a bottomless pit of corruption."

Welcoming the new direct tax code, he stated that the party expects its suggestion on the draft code to be included. The BJP wants tax incentives for savings and housing to continue. It has opposed any move from the exempt-exempt-exempt regime applied to savings such as provident fund and gratuity to exempt-exempt-tax. It wants the different tax rates on long-term and short-term capital gains to continue, and has opposed higher rate of taxation for non-resident Indians. It has demanded that the tax-free income threshold on certain vulnerable sections such as women, retired persons and senior citizens be raised to Rs 3,00,000.  In a move that won't find favour with India Inc, the party has stated that it is against withdrawal of area-based exemptions and has opposed tax holiday for industries till they recovered capital expenditure.

On the proposed Goods and Services Tax, Sinha says there is no clarity on a large number of areas. "Evolution of the rates should be discussed between the government and states." He had earlier suggested a one-year extension of the implementation deadline to April 1, 2011. 

When asked what his stance will be on the contentious issue of linking fuel prices to the market, Sinha says any such move would be opposed.

For a verbatim transcript of the exclusive interview with Yashwant Sinha on CNBC-TV18 click on Next Page. Also watch the accompanying video.