Former Finance Minister P. Chidambaram on Monday said three out of the four wheels of the national economy have been “punctured” and held the BJP government’s “administrative incompetence”, “reckless decisions” and “policy blunders” responsible for the rising farm distress, unemployment and economic failure.
“The tyres on three of the four wheels on which the economy rides are punctured. Firstly exports: the growth rate in the last four years has been negative. Secondly, private investment: it is in the doldrums, if not dead. Gross Fixed Capital Formation (GFCF) is stuck at 28.5 per cent for three years,” he told reporters here.
“Thirdly, private consumption: it was limping until a few months ago, there is a mild uptick, and we keep our fingers crossed.”
He said the only tyre that seemed to be inflated was 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),” he said.
“I do not think, situation of the world economy is affecting India. What is affecting (us) is our own policy blunders, reckless decisions and administrative incompetence,” he said.
Chidambaram said the Reserve Bank of India’s confidence survey stated that 48 per cent felt that the economic situation of the country had worsened in the last 12 months.
“The survey is unlikely to have covered the most backward parts of the country or the most deprived sections of the people. Therefore, the number of 48 per cent will be actually higher,” he said.
The senior leader said farm income was not rising even at a fraction of the growth rate of the economy and farm wages were constant for the last three-four years.
“At these rates, it will take another 14 years to double farmers’ income,” he said while taking a dig at the Narendra Modi government’s plan to double farm income by 2022.
He said farmers’ despondency had turned into anger and they had come on to the streets to protest.
“The principal reasons are uneconomic price for farm produce and stagnant wages of farm labour. MSP (Minimum Support Price) is not adequate. Every farmer knows that the promise of MSP = Cost + 50 per cent is a ‘jumla’,” he said.
Chidambaram said unemployment was rampant in the country, which was a “far cry” from the Bharatiya Janata Party’s promised two crore jobs a year.
“There is great ferment in campuses across the country because young men and women know that there will be no jobs when they graduate. So far, nobody has bought the innovative idea that ‘frying pakoras is also a job’,” he said.
He questioned why the Labour Bureau Survey for October-December 2017 was not yet released.
Chidambaram said the gross NPAs (Non-Performing Assets) had risen in the last four years from Rs 2,63,000 crore to Rs 10,30,000 crore and would rise further.
“No bank is willing to lend a big-ticket loan. Credit growth to industry in the last four years was 5.6, 2.7, -1.9 and 0.7 per cent. The Banks Board Bureau (BBB) is an utter failure. Government cannot find the additional money to recapitalise banks,” he said.
When asked about fugitive businessmen Nirav Modi and Vijay Mallya, Chidambaram said: “I know, they (government) have made no efforts to get them back. In fact, I doubt if they are making any effort. Our position is that they allowed both the gentlemen to leave the county.”
He said demonetisation had caused the growth rate to decline from 8.2 per cent in 2015-16 to 6.7 per cent in 2017-18.
“The Tamil Nadu government has officially acknowledged that 50,000 MSME units were shut down in the state in 2017-18; 5,00,000 jobs were lost; and capital investment in the MSME sector declined by Rs 11,000 crore,” he said.
A flawed Goods and Services Tax has continued to haunt trade and business, he added.
Chidambaram said the social security laws and programmes have been neglected by the BJP-led central government.
“The Food Security Act has not been implemented. MGNREGA is no longer demand-driven, wage arrears have mounted. Crop insurance covers barely 30 per cent of farmers, it is a windfall for insurers. Health Protection Scheme is another ‘jumla’,” he said.
Chidambaram said there was “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.
He said if petroleum products are brought under the Goods and Services Tax (GST), their prices will decline “immediately”.