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P Chidambaram Slams Modi Government Over Economic Slowdown: Full Text Of Explosive Presser

PM Has Been Unusually Silent On The Economy, Has Left It To His Ministers To Indulge In Bluff And Bluster. The Economy Can Be Brought Out Of The Slowdown, But This Government Incapable Of Doing That, Said Chidambaram.

News Nation Bureau | Edited By : Victor Dasgupta | Updated on: 05 Dec 2019, 02:09:07 PM
Former Union Minister P Chidambaram (File Image)

New Delhi:

Former Finance Minister and Congress Leader P Chidambaram slammed the Modi government over economic slowdown. During his 20 minutes press conference, Chidambaram launched a scathing attack on the centre and called the government 'incompetent manager'. 

P Chidambaram also said Prime Minister Narendra Modi was unusually silent on the state of economy and had left his ministers to indulge in "bluff and bluster".
The former Union finance minister, who spent 106 days in jail and was released on bail on Wednesday, said the BJP government believed problems faced by the economy were cyclical even after seven months of this financial year.
"The government is clueless on economy, it is stubborn and mulish in defending catastrophic mistakes like demonetisation, flawed GST, tax terrorism.
"PM has been unusually silent on economy, has left it to his ministers to indulge in bluff and bluster. The economy can be brought out of slowdown, but this government incapable of doing that," said Chidambaram.
Here are the full text of the presser: 

I am glad to speak to you exactly 106 days after I last spoke to you.  As I stepped out and breathed the air of freedom at 8 pm last night, my first thought and prayers were for the 75 lakh people of the Kashmir Valley who have been denied their basic freedoms since August 4, 2019. I am particularly concerned about the political leaders who have been detained without charges. Freedom is indivisible:  if we must preserve our freedom, we must fight for their freedom. I am grateful for the clear and comprehensive order yesterday of the Supreme Court. The order will clear the many layers of dust that have unfortunately settled on our understanding of criminal law and the manner in which criminal law has been administered by our Courts.  I have never commented on cases that are sub judice and I shall continue to adhere to that principle. To many of your possible questions on the case, the answers can be found in the lucid order of the Supreme Court pronounced yesterday. In the last 106 days, I was strong in spirit and I have become stronger because of the following:

1.  My record as Minister and my conscience are absolutely clear. Officers who have worked with me, business persons who have interacted with me and journalists who have observed me know that very well.
2. My family trusts in God.

3. We have total confidence that the Courts will, ultimately, render justice.

Let us leave the matter at that and turn to the the most pressing and explosive issue of the day — which is the state of the ECONOMY. The place to start is diagnosis. If the diagnosis is wrong, the prescription will be useless, may be even fatal. Even after 7 months into the fiscal year, the BJP government believes that the problems faced by the economy are cyclical. The government is wrong. It is wrong because it is clueless.

It is unable to look for the obvious clues because it is stubborn and mulish in defending its catastrophic mistakes like demonetisation, flawed GST, tax terrorism, regulatory overkill, protectionism, and centralized control of decision-making in the PMO. 
Please reflect on each one of the charges that I have made.  In the days to come, I shall speak, give interviews and write elaborately on each of them.

Nothing sums up the state of the economy better than the following series of numbers: 8, 7, 6.6, 5.8, 5 and 4.5

Those are the quarterly growth rates of GDP in the last six quarters. The third and fourth quarters of 2019-20 are not likely to be any better. We will be lucky to end the year if growth touches 5 per cent. And please remember Dr Arvind Subramanian’s caution that 5 per cent under this government, because of suspect methodology, is not really 5 per cent but less by about 1.5 per cent.
The Prime Minister has been unusually silent on the economy. He has left it to his ministers to indulge in bluff and bluster. The net result, as The Economist put it, is that the government has turned out to be an ‘incompetent manager’ of the economy.  The investors of the world — and the bankers, the rating agencies and the Boards of Directors of companies — read The Economist, The
Wall Street Journal and TIME. 

They also pay close attention to numbers. Every number — and I repeat every number — points in the direction of a floundering economy. Here are some.                             

                              2016-17.                2017-18.           2018-19.       2019-20 (part)
IIP.                             4.6                         4.4                     3.9                 2.4
Credit growth
      MSME.                   0.9                         -0.4                     2.3                 2.7
Manufacturing             -1.2                          1.7                    -1.4                -0.7
Core Sector                  4.8                         4.3                       4.4                 0.2
Unemployment            9.65                        4.03                     5.14                7.03
There are many more. You have reported many of them, just go back and look at your data. The government alone is in denial. 
Rural consumption is down according to NSSO. Rural wages are down. Producer prices are down, especially for farmers. Daily wage earners get work for no more than 15 days a month. Demand for MGNREGA is up. FMCG — both durable and non-durable — are selling less. Wholesale prices are up. CPI is going up.
Onions sell at Rs 100 a kg. What do these point to? There is less demand among the people because they have less money and less appetite to consume due to uncertainty and fear. Unless demand increases, there will not be increased production/output or increased investment. PLF of all thermal plants is 48 per cent. If one-half of installed electricity capacity is shut down, there can be no greater disaster. 

Government is calling the present slowdown ‘cyclical’. Thank god they have not called it ‘seasonal’. It is ‘structural’ and the government has no solutions or reforms that would address the structural problems.  The UPA lifted 140 million people out of poverty between 2004 and 2014. The NDA has, since 2016, pushed millions of people below the poverty line.

The economy can be brought out of the slowdown,  but this government is incapable of doing that. I believe that the Congress and some other parties are better equipped to pull the economy out of the slowdown and push economic growth, but we have to wait for better times.

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First Published : 05 Dec 2019, 02:09:07 PM