In recent weeks, most Opposition parties, but particularly the Congress, have chosen to focus their attack on the Modi government on its handling of the economy, lack of jobs and farm distress. Former finance minister and Bharatiya Janata Party (BJP) veteran Yashwant Sinha’s latest criticism of the Narendra Modi government’s moves have given the Congress party, which has struggled to build a campaign around the present establishment’s failures on the economic front, a major shot in the arm.
Senior BJP leader Yashwant Sinha in hard-hitting remarks has lashed out at “Superman” Finance Minister Arun Jaitley for making a “mess” of the Indian economy which is headed for a “hard landing” as sector after sector is slipping into distress.
In an editorial page article in The Indian Express, Sinha, who was Finance Minister in the Atal Bihari Vajpayee government, said Prime Minister Narendra Modi “claims he has seen poverty from close quarters (and) his finance minister is working over-time to make sure that all Indians also see it from equally close quarters”.
Sinha said Jaitley had been luckier than his predecessors to hold the Ministry at a time when lakhs of crores of rupees were at his disposal following the depressed global crude oil prices.
But he wasted the oil bonanza which “was waiting to be used imaginatively”.
“The legacy problems like stalled projects and bank NPAs were no doubt there and should have been managed better… But the legacy problems have not only been allowed to persist, they have become worse.”
Illustrating the picture of the Indian economy today, Sinha said private investment has shrunk “as never before in two decades” while industrial production has all but collapsed.
“Agriculture is in distress, construction industry, a big employer of the workforce, is in the doldrums, the rest of the service sector is also in the slow lane, exports have dwindled, sector after sector of the economy is in distress.”
Continuing his tirade against the government’s demonetisation decision, Sinha said spiking large currency notes “has proved to be an unmitigated economic disaster” which coupled with “a badly conceived and poorly implemented GST” has played havoc with businesses and sunk many of them.
“Countless millions have lost their jobs with hardly any new opportunities coming the way of the new entrants to the labour market. For quarter after quarter, the growth rate of the economy has been declining until it reached the low of 5.7 per cent in the first quarter of the current fiscal.”
He said if the government had not changed the methodology for calculation of the GDP in 2015, the growth rate of 5.7 per cent would have actually been 3.7 per cent or less — according to the old method of calculation.
He came down heavily on the government’s view that the slowdown was for technical reasons and cited the SBI, the largest public sector bank of the country, as stating “with an unusual frankness that the slowdown is not transient or ‘technical’, it is here to stay”.
He said it was not difficult to anticipate the reasons for the slowdown and countermeasures taken to deal with them.
“But that called for devoting time to the task, serious application of mind, understanding of the issues and then working out a game plan to tackle them.”
He noted that Jaitley, who holds the department of disinvestment, and also held the Ministries of Defence (which was given to Nirmala Sitharaman in the last cabinet rejig) and Corporate Affairs, was carrying the heavy burden of so many extra responsibilities and it was “perhaps too much to expect from” him.
“I have handled the Ministry of Finance and know how much hard work there is in that ministry alone. Finance Ministry, in the best of times, calls for the undivided attention of its boss if the job has to be properly done. In challenging times it becomes more than a 24/7 job. Naturally, even a superman like Jaitley could not do justice to the task.”
Sinha said he was speaking about the mess after realizing that “I shall be failing in my national duty if I did not speak up even now”.
“I am also convinced that (it) reflects the sentiments of a large number of people in the BJP and elsewhere who are not speaking up out of fear.”
He said the SME sector was suffering from an “unprecedented existential crisis”.
“The input tax credit demand under the GST is a whopping Rs 65,000 crore against a collection of Rs 95,000 crore. The government has asked the income tax department to chase those who have made large claims.
“Cash flow problems have already arisen for many companies especially in the SME sector. But this is the style of functioning of the Finance Ministry now.
“We protested against raid raj when we were in opposition. Today it has become the order of the day.”
The Congress, led by party Vice President Rahul Gandhi, launched a frontal attack on the Modi government over the state of the economy, after Yashwant Sinha aired his views on the “mess”, and warned people to brace for tougher times ahead.
“Ladies and gentlemen, this is your copilot and FM speaking. Please fasten your seatbelts and take brace position. The wings have fallen off our plane,” Gandhi tweeted while sharing the article Sinha wrote in The Indian Express, critical of Finance Minister Arun Jaitley.
Former Finance Minister and senior Congress leader P. Chidambaram said Sinha had spoken the truth and shown a mirror to the government by noting that had it not changed the methodology for calculation of the GDP in 2015, the growth rate of 5.7 per cent would have actually been 3.7 per cent or less.
“Yashwant Sinha speaks ‘Truth to Power’. Will Power now admit the Truth that economy is sinking?,” Chidambaram tweeted.
Referring to Sinha’s article in which he also wrote that when the BJP was in opposition, it was against the “raid raj” but now it seems to have become the order of the day, Chidambaram said: “Instilling fear in the minds of the people is the name of the new game, says Yashwant Sinha.”
“Eternal truth: No matter what Power does, ultimately Truth will prevail,” said Chidambaram.
Chidambaram said the Congress had assiduously exposed the “many weaknesses and a terrible mismanagement” of the economy.
“We are happy that Yashwant Sinha has echoed our criticism,” said Chidambaram, who added: “It is not often that from this platform the principal opposition party will welcome a statement of a veteran leader of the ruling party.”
Chidambaram said Sinha’s views were not different from what MPs belonging to the BJP and other parties “have told us since many months privately and in soft whispers”.
He said it was a sad commentary on the times that MPs were afraid to reflect what they see and hear around them, especially in their constituencies. “Yet we call ourselves a free country.”
Chidambaram said it were not only MPs who have become silent. “We have witnessed numerous examples of news reports and articles being pulled out before publication; of television interviews being taken off air; of scheduled talks at universities being cancelled; of social activists being investigated on trumped up charges; of editors and reporters being unceremoniously sacked; of academics and scholars being threatened; of judges being indirectly punished; and, most tragically, of authentic voices of the people being silenced by brutal killings.”
Chidambaram said at least a dozen BJP MPs have “spoken to us” in the Central Hall and in committees about the economy. “Nobody dares to ask questions. An MP from Maharashtra who raised questions was asked to shut up. In this atmosphere of fear, if Sinha speaks up then he is speaking the truth.”
Congress spokesperson Randeep Surjewala said Sinha had “rightly spoken as to how an experimental Finance Minister and an autocrat Prime Minister can wreck India’s economy” and that it was the “time for the people of this country to seek the relevant answers both from Arun Jaitley as also from Narendra Modi”.
Surjewala said the facts and figures point to how the “economy is in a state of flux” in India.
“The GDP has fallen from 9.2 per cent to 5.7 per cent and as per old (methodology of calculation) will be about 3.5 per cent. NPA in this country has risen to Rs 11 lakh crore, the share of exports in the GDP is at 14 year low of 19.4 per cent, private investment and gross capital formation as a percentage of the GDP in 2016-17 is actually at a low of 14 years. Credit growth is lowest in the last 63 years, manufacturing PMI is at a low of eight years, inflation is at a five-month high.
“On top of that, there is Rs 2 lakh, 67 thousand crore of revenue being collected by the government of India through taxes on petrol and diesel. The Prime Minister only speaks and the Finance Minister only mismanages the economy.”
Chidambaram also said that owing to “an atmosphere of fear”, Indian industry is not complaining about the policy paralysis of the Narendra Modi government and urged them to speak up.
On being told that India Inc complained of policy paralysis during the UPA II, but are not doing so now, Chidambaram said: “I just want to make a correction. You said Indian industry doesn’t complain of policy paralysis. The correction is the Indian industry doesn’t complain (publicly).
“They complain to us privately. Indian industry must speak up.”
The Congress leader also cited the happening in the US last month when “business persons and heads of several companies quit US President’s (Donald Trump) several committees and councils in protest against what he was saying and doing”.
However, stressing that he was “not asking Indian industry to do that”, he said: “Industry must at least have the courage to speak up on matters relating to the economy.”
Chidambaram also recalled how active business chambers CII, Assocham and Ficci were during the UPA’s rule.
“They criticised us in several meetings.
“But, now there is an atmosphere of fear. I am appealing to Indian industry, doyens of Indian industry to speak up. Say what’s happening. We just saw major companies shedding jobs. Companies like Cognizant, Infosys shed jobs, Yes Bank shed 2,500 jobs.
“But, they (the government) are sort of papering it over by saying this is normal attrition. This is not normal attrition,” he said.
However, NITI Aayog Vice Chairman Rajiv Kumar said that the slowdown the Indian economy is going through has bottomed out and the next two-quarters will show some improvement in the growth rates.
He said the downward spiral of economic growth began during the last two years of the UPA government and had now, according to him, “bottomed out”.
“I think 2018-19 will be much better than the current fiscal,” he said at an event here.
The Vice Chairman of the government’s premier think-tank added that pain due to demonetisation and the rollout of Goods and Services Tax (GST) was also almost over. He said that all countries which adopted GST have gone through some decline in the growth rate. (IANS)