There is no doubt that Indian economy has been slowing down and off late the downturn has increased post demonetization and a haste GST roll out. Now Yashwant Sinha has come out in open heavily criticizing the Narendra Modi led BJP government in the centre not been able to push the growth rates and instead put in a collapsing condition.
Is he frustrated or Opportunistic in heavily coming down upon the BJP government?
Yashwant Sinha was a key member of the BJP government under Atal Bihari Vajpayee in 1999-04 and was also the finance minister. Post 2014 election win, all the senior members of BJP including Yashwant Sinha, L K Advani & Manohar have been sidelined as an age limit of 75 years has been set to be in active role in the government barring a few exceptions in PMO function.
He might as well have been looking for an opportunity to play an active role in the government particularly finance ministry as he has directly targeted the FM Arun Jaitley in the article.
However, it looks to be a great deal of frustration as he has criticized the government on all counts and the failures despite economic favors India got due to low crude oil prices.
Today, Yashwant Sinha in an editorial of Indian Express expressed that “I shall be failing in my national duty if I did not speak up even now against the mess the finance minister has made of the economy. I am also convinced that what I am going to say reflects the sentiments of a large number of people in the BJP and elsewhere who are not speaking up out of fear.”
Arun Jaitley is the luckiest Finance Minister post liberalization
He argued that Arun Jaitley is one of the luckiest finance minister who saw crude oil prices fall to an extend that government made windfall gains and yet he has failed the nation without bringing effective reforms, taxes and lift the spirt of economy. However, the problems of high NPA and stalled projects are legacy, there was hardly anything done by Finance Minister through the gains of crude oil price to address such issues.
Arun Jaitley had lost his Lok Sabha seat and yet rewarded
Yashwant Sinha targeted PM Narendra Modi for rewarding Arun Jaitley not just finance ministry but even key ministries such as Defense and corporate affairs despite of losing his Lok Sabha seat from Amritsar. He shared that Atal Bihari Vajpayee denied Jaswant Singh and Pramod Mahajan of any key posts in the government as they had not won their respective election seats.
He argued that been a finance minister in previous BJP government, finance ministry is a tough job and it requires a full time minister while Arun Jaitley still holds three ministries – Finance, Corporate Affairs and Department of Disinvestment.
“Arun Jaitley is working overtime to make sure all Indians also see poverty from close quarters just like Prime Minister claims to have seen it.”
State of Indian Economy is Poor
He mentioned that economy is going through a tough time with private investment coming to two-decade low, industrial production has collapsed, agriculture and farmers are in big trouble with the rest of the services sector having a jobless growth.
In particular, construction sector, that employs the most among informal sector has been hit hard specially after demonetization. Quarter on quarter the growth rate of the economy has been plummeting and reached its low of 5.7% in first quarter of FY2018, a lowest in three years.
“Demonetization has proved to be an unmitigated economic disaster, a badly conceived and poorly conceived. And then came GST which has been a havoc for business with millions losing their jobs.”
While agreeing with the government on demonetization is not responsible for the slowed down economy but added demonetization only added fuel to the fire.
40 leading companies are facing a bankruptcy, massive farmer loan waiver, SME sector facing existential crisis and GST not proving to be a game changer is a sign of serious distress in the economy that requires immediate attention and correction action before situation goes out of hand.
Real GDP growth post calculation method changed
The government had changed the method to calculate the GDP growth in 2015 that led to increase in the rate by 200 basis points for previous year. If calculated by old method, the growth has been mere 3.7% instead of 5.7% as claimed by the government. The issues that we are seeing now are not appearing suddenly but have got accumulated over time causing this crisis in present day.
Even SBI has been contradicting the government on GDP growth and highlighted that slowdown is not due to ‘technical reason’ but pretty much to stay here.
BJP ministers meet to discuss economic slowdown
BJP held its National Executive meet in New Delhi where all the key party members, BJP ministers and chief ministers took part to discuss the economic slowdown and steps to be taken to uplift the economy. While the key meeting between Prime Minister along with key ministers to formulate the concrete steps such as providing stimulus, re-capitalization, tax reforms among others is postponed and not known of when it’s going to happen.
Prime Minister Economic Advisory Council (PMEAC) constituted and promise of stimulus package
PMEAC has been re-constituted that consists of 5 members selected by the government to advice the prime minister on economic issues and suggest corrective actions to bring back the growth in the economy. At the same time Finance Minister has promised that a stimulus package would be given to revive growth.
Revival not possible before next general elections in 2019
Corrective actions take their own course of time and looking at current situation of the economy it looks difficult to revive the economic growth before the next general elections in 2019. No one has a magic wand to lift up the growth and get people jobs.
“He said, Bluff and bluster is fine for the hustings, it evaporates in the face of reality.”