The Congress on Monday launched a scathing attack on Narendra Modi-led Centre government over its “flawed” policies, saying that three of the four tyres of India’s economy—exports, private investment and private consumption—have been punctured.
Addressing a press conference in Delhi, former finance minister and noted economist P Chidambaram said that two of the Modi government’ “disastrous” decisions - demonetisation and Goods and Services Tax (GST) – had an unpropitious impact on the country’s economy.
From increasing agrarian crisis in the country to soaring fuel price and unemployment to inflation, Chidambaram took on the ruling government point by point.
On agrarian crisis and MSP
“Farmers’ despondency has turned into anger and farmers have come to the streets to protest. The principal reasons are uneconomic prices for farm produce and stagnant wages of farm labour. For the few crops that have an MSP, the MSP is not adequate and the annual increases have been niggardly. Every farmer knows that the promise of MSP (Cost + 50 per cent) is yet another jumla (gimmick) of the Modi government,” Chidambaram said.
On skyrocketing fuel prices
Attacking the ruling NDA government over the skyrocketing petrol and diesel prices, Chidambaram said, “There is widespread anger about the artificially fixed prices of petrol, diesel and LPG. There is absolutely no reason why the prices should be higher today than what they were in May-June 2014. It is nothing but a case of fleecing the helpless consumer.”
Questioning the Modi government for not releasing the Labour Bureau Survey for October-December 2017, the former finance minister said, “Joblessness is rampant. The only reliable data is the quarterly survey of the Labour Bureau. Those numbers reveal that a few thousand jobs are created — or added — every quarter. That is a far cry from the 2 crore jobs a year that was promised as part of Modi’s ‘Achhe Din’.”
On Inflation and RBI’s Repo rate hike
Reacting to the recent Repo rate hike by the Reserve Bank India (RBI), the Congress leader said, “Inflation expectations are high. Interest rates will rise, throwing more burden on consumers and producers.”
Hitting out at the Modi government over its “black money killer” move of note ban, he said, “The adverse effects of demonetisation have been established beyond doubt. The growth rate has declined from 8.2 per cent in 2015-16 to 6.7 per cent in 2017-18 —exactly 1.5 per cent as I had predicted and endorsed by Manmohan Singh,” adding that the Tamil Nadu government has officially acknowledged that 50,000 SME units were shut down in the State in 2017-18; 5,00,000 jobs were lost; and capital investment in the SME sector declined by Rs 11,000 crore.
On Good and Services Tax (GST)
“GSTR Form 2 (for input tax credit) and GSTR Form 3 (for net tax liability) have not been notified so far. Tax liability is being calculated on the temporary GSTR Form 3B, which is illegal. Refunds of thousands of crore rupees have been held up putting businesses, especially exporters, in jeopardy,” he said.
On three of the four punctured tyres of economy
“Firstly, exports – the growth rate in the last four years has been negative. Secondly, private investment is in the doldrums, if not dead. Capital Formation (GFCF) is stuck at 28.5 per cent for three years. Lastly, private consumption which was limping until a few months ago, has a mild uptick. The only tyre that seems to be inflated is government expenditure, but here too the government’s options are getting limited because of the pressure on the current account deficit (CAD) and the fiscal deficit (FD),” the Congress leader added.
Watch full press conference here: