Nirmala Sitharaman says P Chidambaram's 'most capitalist budget speech ever' remark is a compliment

Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Wednesday reacted to comments made by former Finance Minister and Congress leader P Chidambaram who claimed the Budget 2022 speech 'most capitalist ever'.

"People will reject this capitalist budget. Today's budget speech was the most capitalist speech to be ever read by an FM," he said on Tuesday. "The word 'poor' occurs only twice in para 6 and we thank the Finance Minister for remembering that there are poor people in this country."

On Wednesday, during an interview with News18, Sitharaman -- whose budget put emphasis on trade and industry -- said that she took Chidambaram's remark as a compliment.

"For a person and a party that otherwise claims that 1991 opened up India to globalisation... That's how Congress party wants everyone to remember it. That they were the ones who opened socialist India to the world.... For them to say it was a capitalist speech, especially by the author of the 'Dream Budget', it will certainly be a certificate," Nirmala Sitharaman said.

In 1991, Congress was the party in power with PV Narasimha Rao as  the Prime Minister. In the next term, with United Front (a coalition of Congress and 12 other parties) in power, the then Finance Minister Chidambaram presented what is known as the 'Dream Budget'.

He used the Laffer Curve principle to lower tax rates to increase collections. Chidambaram slashed maximum marginal income tax rate for individuals from 40 per cent to 30 per cent and that for domestic companies to 35 per cent.

It also unleashed a number of major tax reforms including a voluntary disclosure of income scheme to recover black money. The ‘Dream Budget’, considered to be a socialist one, also slashed customs duty to 40 per cent and simplified excise duty structure.