NEW DELHI, Feb 10: Former Finance Minister P Chidambaram on Monday tore into Narendra Modi government’s handling of the economy, saying it was “perilously close to a collapse” and was being attended to by “incompetent doctors”.
The economy, he said, was facing twin problems of rising unemployment and falling consumption but the government continues to live in denial.
Initiating the debate on the Union Budget for 2020-21 in the Rajya Sabha, Chidambaram said more money needs to be put in hands of people and not give “extraordinary powers” to junior taxmen to unleash “tax terrorism.” He offered Finance Minister Nirmala Sitharaman the same advice that Modi as BJP’s prime ministerial candidate had offered him in November 2013.
On “November 2, 2013, a very distinguished political leader said and I quote: “Economy is in trouble. The youth wants jobs. Devote more time to the economy, not on petty politics. Please focus on the job at hand. Very wise advice. I can’t do anything better than reading this piece of advice to the Finance Minister”, he noted.
According to him, the economy was facing structural problems but the government continues to believe they were cyclical in nature.
Modi government’s chief economic adviser for four years, Arvind Subramanian, has stated that the economy is in the ICU (Intensive Care Unit). But “I would say the patient has been kept out of the ICU and incompetent doctors are looking at the patient,” Chidambaram said.
“It is dangerous to have a patient out of the ICU and being looked upon by incompetent doctors. What is the point standing around and chanting slogan ‘Sab ka Saath, Sab ka Vishwas’,” he said.
According to Chidambaram, the BJP government lives in denial, refuses to acknowledge its mistakes and has an “outdated” predisposition towards protectionism and a strong rupee, and is against bilateral as well as multilateral trade agreements.
“We have an economy which is perilously close to collapse. It has to be attended to by very competent doctors. In the last few years, we have found the doctors are not so competent,” he said.
“We are living in denial and we are ignoring two big elephants in the room — one is rising unemployment and the other is fall in consumption. Unemployment rises, consumption falls, the Indian economy becomes poorer and not richer,” he noted. Chidambaram called demonetisation of old 500 and 1,000 rupee notes as well as the hurried implementation of a “flawed” Goods and Services Tax (GST) with wrong design, rates, structure and procedure and an unprepared system as “monumental blunders” that ruined the economy.
“Because of its refusal to admit mistakes, because it lives in denial, because of its predisposition, the government either does not know or if it knows is not willing to make it clear that this is the state of the economy,” he said. With an unprecedented six consecutive quarters of falling growth, the economy is facing demand constraints and is investment-starved, he said.
“It is living in denial. It simply does not accept that the state of the economy is extremely bad,” Chidambaram said as he reeled out the government’s own statistics to drive home the point.
While GDP has fallen to an 11-year low of 4.5 per cent in 2019 July-September quarter, agriculture is growing by just 2 per cent, while consumer price inflation has risen from 1.9 per cent in January 2019 to 7.4 per cent in a matter of 11 months. (PTI)
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