Government, which has of late been talking of pushing reforms, may get support from BJP on raising the FDI in insurance sector if it 'reaches out' to the opposition.

"We will see. They have to reach out to us with their concrete proposals. We'll look at it. If we find it worth supporting, we will certainly support," BJP leader Yashwant Sinha has said.

He was replying to a question whether BJP would support the government if it comes out with a proposal that goes upto 49 per cent Foreign Direct Investment in the insurance sector the way the BJP-led NDA government had proposed earlier.

"Well, you are asking me a hypothetical question. When I had discussed it earlier with the then Finance Minister, he agreed with us that it should be restricted to 26 per cent," Sinha told Karan Thapar in Devil's Advocate programme on CNN-IBN.

When asked if there is room for BJP to support the government if it goes upto 49 per cent in the way the BJP thought of 49 per cent, Sinha said, "they will have to reach out to us."

During the NDA regime, BJP had proposed to bring 49 per cent FDI in insurance if the balance of 23 per cent equity was given to NRIs, PIOs, OCBs, FIIs, but the Congress had opposed it then and demanded 26 per cent FDI instead.

Attacking the government, Sinha described the current economic situation in the country as 'very serious', saying it is worse than it was in 1999 and squarely blamed outgoing Finance Minister Pranab Mukherjee and his predecessor P. Chidambaram for it.

He also hit out at Prime Minister Manmohan Singh accusing him of being 'dishonest' by trying to distance himself from the actions taken by the Finance Ministers in his Cabinet.

On the current economic situation, Sinha said, "It's very, very, very serious...I am saying it with all seriousness that the situation is much worse than it was in 1999".

He attacked Mukherjee saying he did not take steps necessary to bring back the economy on the growth path while Chidambaram was accused of leaving the economy in shambles.

On suggestions that both Mukherjee and Chidambaram had been negligent and deliberately so during their tenure as Finance Ministers, Sinha said, "When do you thatch your roof. When the Sun is shining. We didn't do that...He (Chidambaram) saw the warning and failed to act."

On Mukherjee, he said, "When he inherited a declining economy, he did not do very much to improve it."

Sinha said, "Whatever excuses they are giving, they were all present. They were all aware of it and despite that they did not take the corrective steps."

On whether Mukherjee, who was a man of socialist-era licence raj, should have been made the Finance Minister, the BJP leader said the Prime Minister should have known his mindset and his outlook on economy much better than anyone else as he had worked with him as RBI Governor.

"But he chose him to make the Finance minister in 2008 and he took that risk which has not paid of," Sinha said.

To a question on whether by distancing himself from Pranab Mukherjee, the Prime Minister was being complicit, political and presentational, Sinha went a step further saying, "It's even worse. I'll got a step forward and say it is dishonest."

He said, "Through his utterances he is trying to distance himself from the policies which were followed by Pranab Mukherjee and Manmohan Singh. Not Pranab Mukherjee alone. He is trying to distance himself not only from Pranab Mukherjee but also from the decisions of which he was fully partner in at that time."

Explaining the processes adopted in the Finance Ministry, Sinha said, "no important decision, whether in the time of Chidambaram or in the time of Mukherjee, could not have been taken by the Finance Minister alone. The budget is prepared and every word of it is seen and approved by the Prime Minister.''

"So if today, the Prime Minister is saying that there are issues on the taxation side, didn't he know that retro-taxes and GARR will create this kind of atmosphere. And if he did, then why did he allow it to happen?"

He said the Prime Minister is complicit and is a party to every decision that the Finance Minister takes, especially in his budget.

"No, it is not open to any Prime Minister to stand up and say that I did not agree to my Finance Minister but I couldn't do anything," he said.

Sinha also feared that Singh's optimism on the economy will remain on paper as the government is unlikely to take any major steps when the general elections are due in 2014.

"My fear is that his pretty words will remain just pretty words. They will remain on paper. We are inching towards elections as elections are due in early 2014. And now is not the time to take tough decisions. And I don't expect the government, which has not taken tough decisions in the last eight years to suddenly become active and take tough decisions," the BJP leader said.

Sinha remarked that politics in this country has always trumped over economics and attacked UPA Chairperson Sonia Gandhi on this front, saying "she has trumped reforms in the last eight years".

Suggesting ways to improve the economy, Sinha -- who has been a former Finance Minister -- said, "It is a matter of almost life and death for this country that the fiscal deficit should be reined in."

"I would suggest that the total expenditure of government, which is about Rs 15 lakh crore, should immediately be reduced across the board by a 10 per cent cut. It should be reduced by Rs 1,50,000 crore, which will have an impact of reduction on fiscal deficit by 1.5 per cent," he said.

On General Anti-Avoidance Rules, he said it has not been drafted well and should not be put in cold storage.

"Government should soften GARR by incorporating changes suggested by the Standing Committee on Finance," he suggested.

On the Vodafone case, Sinha said, the Parliament has the right to pass legislation especially in tax matters which have retrospective effect.

"But this is a power which has to be exercised with a great deal of caution," he said, adding, "The Vodafone case has clearly been very shabbily handled by the government. They should hold discussions with the company and the legal experts to find a way out."

Sinha said the BJP as a party was not in favour of FDI in retail.

"That is something we have made very clear...FDI in retail, we are opposed and will continue to oppose. There is no circumstance which compels us to bring FDI in retail," he said.

On Direct Taxes Code, he said it has been with the government since March of this year and the GST is under the consideration of Standing Committee on Finance.

"We will be able to submit our report in the Monsoon Session of Parliament," he said.