Congress uses Sinha's criticism to mount fresh attacks on Modi's economic policies

Yashwant Sinha
Yashwant Sinha
The opposition Congress  today gleefully latched on to senior Bharatiya Janata Party (BJP) leader Yashwant Sinha's scathing criticism of the government's handling of the economy in a newspaper article to mount fresh attacks on the Narendra Modi regime on the issue even as Ministers came out to rebut the allegations made by one of their own.
"Ladies & Gentlemen, this is your copilot & FM speaking. Plz fasten your seat belts & take brace position. The wings have fallen off our plane," Congress Vice-President Rahul Gandhi said on micro-blogging site Twitter, sharing the link of an article by Mr. Sinha in today's edition of Indian Express.
Mr. Gandhi, who was on the last day of a three-day tour of poll-bound Gujarat, also referred to Mr. Sinha's lacerating criticism of the BJP government's performance at various meetings here addressed in the state. "We are not saying it, it is one of their own leaders," he said.
"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," Mr. Sinha, 79, who was Finance Minister in the Atal Bihari Vajpayee government and now finds himself sidelined within the party, said in his article.
He wrote about how Finance Minister Arun Jaitley at one stage handled as many as three different portfolios, including Defence and Corporate Affairs. "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," he said.
"Jaitley was, to begin with, a lucky finance minister, luckier than any in the post-liberalisation era. Depressed global crude oil prices placed at his disposal lakhs of crores of rupees. This unprecedented bonanza 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 like the crude oil bonanza. But the oil bonanza has been wasted and the legacy problems have not only been allowed to persist, they have become worse.
"So, what is the picture of the Indian economy today? Private investment has shrunk as never before in two decades, industrial production has all but collapsed, agriculture is in distress, construction industry, a big employer of the work force, 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, demonetisation has proved to be an unmitigated economic disaster, a badly conceived and poorly implemented GST has played havoc with businesses and sunk many of them and 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, the lowest in three years. The spokespersons of the government say that demonetisation is not responsible for this deceleration. They are right. The deceleration had started much earlier. Demonetisation only added fuel to fire," Mr. Sinha said.
He pointed that the methodology for calculation of the GDP was changed by the present government in 2015 as a result of which the growth rate recorded earlier increased statistically by over 200 basis points on an annual basis. "So, according to the old method of calculation, the growth rate of 5.7 per cent is actually 3.7 per cent or less," he said.
"The reasons for this decline are not far to seek nor have they appeared suddenly. They have been allowed to accumulate over time to cause the present crisis. It was not difficult to anticipate them and take counter measures 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. It was perhaps too much to expect from a person who was carrying the heavy burden of so many extra responsibilities. The results are there for all of us to see," Mr. Sinha said.
"The prime minister is worried. A meeting convened by the prime minister with the finance minister and his officials appears to have been postponed indefinitely. The finance minister has promised a package to revive growth. We are all waiting with bated breath for this package. It has not come so far. The only new thing is the reconstituted Economic Advisory Council of the prime minister. Like the five Pandavas they are expected to win the new Mahabharat war for us.
"The performance of the monsoon this year has not been flattering. This will further intensify rural distress. The farmers have received 'massive' loan waivers from some state governments varying from one paise to a few rupees in some cases. Forty leading companies of the country are already facing bankruptcy proceedings. Many more are likely to follow suit. The SME sector is 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 specially 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. Post demonetisation, the income tax department has been charged with the responsibility of investigating lakhs of cases involving the fate of millions of people. The Enforcement Directorate and the CBI also have their plates full. Instilling fear in the minds of the people is the name of the new game.
"Economies are destroyed more easily than they are built.  It took almost four years of painstaking and hard work in the late nineties and early 2000 to revive a sagging economy we had inherited in 1998. Nobody has a magic wand to revive the economy overnight. Steps taken now will take their own time to produce results. So, a revival by the time of the next Lok Sabha election appears highly unlikely. A hard landing appears inevitable. Bluff and bluster is fine for the hustings, it evaporates in the face of reality.
"The prime minister claims that he has seen poverty from close quarters. His finance minister is working over-time to make sure that all Indians also see it from equally close quarters," Mr. Sinha added.
The article came in handy for Mr. Gandhi, who had for the past two days relentlessly attacked Mr. Modi and the BJP for their handling of the economy and especially on demonetisation and GST.
His party colleague and former Finance Minister P. Chidambaram said on Twitter: " Yashwant Sinha  speaks Truth to Power. Will Power now admit the Truth that economy is sinking?"
"No matter what Power does, ultimately Truth will prevail," he added.
Later, Mr. Chidambaram addressed mediapersons at the Congress headquarters, where he said that he had been writing about the "same weaknesses in the economy" and that his party had been pointing them out regularly over the past several months.
"We are happy Yashwant Sinha has spoken the truth, echoed our views about economy...he has spoken truth to the power," he said.
“The government is completely clueless about what is causing the economic decline. How long will it hide behind the rhetoric of the Prime Minister and the slogans of the party?” he asked. 
Union Home Minister Rajnath Singh and Railways Minister Piyush Goyal defended the government, asserting that the Indian economy was the fastest growing in the world. They said measures such  as demonetisation and GST were bound to create some "uncertainty".
“The whole world acknowledges that India is the fastest growing economy in the world. No one should forget this fact. In the matter of economy, in the international arena, India’s credibility has been established,” Mr. Rajnath Singh said.
Mr. Goyal said the government would not be affected by the criticism and would stay the course as far as reforms were concerned.
“There is bound to be some uncertainty when some transformative changes are made. It may take some amount of time to absorb these changes but this will pass. Challenges come but we will stay the course. The government is steadfast in its resolve to end black money and corruption. It won’t flinch due to some criticism,” he said.


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