Arun Jaitley
This country has survived many economic crises in the past. We survived the East Asian Economic crisis in the late 90’s, the slowdown of the earlier part of the last decade; to some extent we tried to survive even the global financial crisis, or, the Lehman crisis of the last decade. But there is one fundamental difference. Today, the situation appears to be far gloomy, and the ability of the Government and its political leadership to handle this crisis itself has lost confidence, not only in the country, but is also losing the confidence of the investors’ community. This has happened over the last few years.
Let me start with the last point which the Prime Minister has made. He has emphasised the need for a larger consensus on the economic issues; of course, it is necessary. But then consensus on economic issues emerges out of a political environment. If the political environment for consensus is not built up by the Government, on the contrary, it is regularly fractured by the Government of the day then to expect consensus only on economic issues itself will be a daunting and a challenging task. No Government can say I want consultation, I want to be very democratic, but I am a democrat only when in distress. That seems to be the attitude of this Government. Therefore, I think, it is a lesson for all of us, particularly for this Government, that in a course of its relationship with State Governments, with political parties, its conduct in this House while conducting the affairs and the conduct of its investigating agencies must reach a level of fairness and political acceptability, then, despite differences on crucial matters of national interest, there could be consensus and we welcome a consensus on such matters. But if the Government regularly breaks and fractures that consensus, then, it may be very challenging for it to expect a consensus when in isolation. Sir, this Government has lost confidence and it is for the hon. Prime Minister to reply to my question. You blame the global practice for it. You blame various other factors which have come in. But has the Prime Minister realised that the whole world was warning us, it was global financial media which was warning us, it was global investors which was warning us that there was a spate of policy paralysis going on in India. This has been the criticism for the last four or five years. The whole world warned us. It was a fair comment that the world was making. It was not a comment made by us. We did not invent this phrase. Never has this phrase been used for economic policy direction in India as much as it has been used in the last few years. This has been used by responsible international observers. Why did we lose the trust of the international investors? Why did we lose the trust of the domestic investors? Instead of somebody investing in India, even on the Current Account Deficit you had a reverse flow of investment from India going to outside; and that had an impact. People started saying that India may no longer be the best place to do business. From 1991 onwards till today, under Governments of different political complexions, we as a nation, succeeded in showcasing India as an economic destination. In the last few years that image was lost. Kindly see the impact, hon. Prime Minister, that corruption had. The Finance Minister has recently made a statement indicating the blame on certain other institutions. Let us take the case of Spectrum allocation and see the spiral effect. It was a case of * corruption. CAG came out with a Report. CAG gave some numbers on which we may have different views. The Court acted because it was apparently a case of corruption. Sir, may I just request you that this is a very important issue? ……………Finally, you had a situation besides prosecutions, you had licenses being terminated, investments being confiscated. Now this was a spiral effect of corruption. We became a country where investments could be confiscated, licenses could be cancelled. As for coal, the Government speaks of essential imports. Oil is an essential import; edible oils are essential imports. But we have coal reserves. What has happened in the last six-seven years because of coal? Essentially, because of corruption, you have today a situation where we have to import almost 20 billion dollars of coal. The global prices are going up. The result of which is current account deficit. As for Iron ore, corruption both by a section of the industry as also by our system, including agencies in the… , you have a situation that our exports have come to a standstill. All these factors are contributing to the current account deficit. Now we can say that the courts are responsible; CAG is responsible. But the root cause is in what we did, and this was a spiral effect of what corruption took place within our system; the spiral effect of which was that people started losing confidence, as far as we were concerned.As for policy decision, here leadership was required not only for policy directives. You can indicate that some difficult decisions took place during 2009 and 2011, but when some fiscal suggestions were made, including suggestions for retrospective taxation, the Prime Minister should have, as an eminent economist and leader of the Government, applied himself as to what the long-term impact of this was going to be. In each of these decisions, you lost the trust of global investors; you lost the trust of domestic investors.
Therefore, merely to say that there are global factors, there is a crisis in Syria, that others are also doing very badly, hon. Prime Minister, a failed candidate in a class always has this explanation that the whole class has failed this time; that is no explanation. We were amongst the fastest growing economies in the world. We have been showcased before the world. Today, agencies are indicating that our growth rate may fall even below 4 per cent this year. Now if this is to happen, you have to realize as to what is the priority of this Government. We would like to have a specific answer. You speak in terms of correcting the fiscal deficit. Look at the figures. There was a time when the going was good and for years together we had 8 to 9 per cent growth rate. We came down to 2.5 to 3 per cent fiscal deficit. Then electoral expenditure was undertaken. As a result of which, from 2.5, you have gone up to 6 per cent. Your revenue deficits went up. And you merely say that the periods of 2009 and 2011 were responsible because those in-charge at that time are not here to defend themselves. This is an exercise we started in 2007-08 keeping the last election in mind.
Therefore, you now have to decide whether you want to go back to prudence or you want to give priority to populism, which I am afraid your Government is still doing. Because, if you continue to follow the course, then the legacy that you leave behind will not be the legacy that you left behind as Finance Minister. That legacy was different. The legacy then you will leave behind as Prime Minister is going to be, after me the deluge. The country cannot afford it. Therefore, we would like you to respond to these clarifications as though these domestic factors have also contributed to the mess in which the country has been landed up.
(The author is Leader of Opposition in Rajya Sabha)
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