Chidambaram launches 10-point attack on Modi Govt over economic policies

NEW DELHI, June 11: Former finance minister P Chidambaram on Monday hit out at the Centre saying three of the four tyres of the country’s economy viz. exports, private investment and private consumption have been punctured. Attacking the government’s flagship projects, demonetisation and the Goods and Service Tax (GST), said that both the exercises have had an adverse impact on the economic health of the country and that there is widespread anger among people owing to this.
1. RBI’s Consumer Confidence Survey
Chidambaram said the RBI’s Consumer Confidence Survey (May 2018) found that 48 per cent of people felt that economic conditions had worsened in the last one year. “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.
2. Farm prices and MSP
“Farmers’ despondency has turned into anger and farmers have come to the streets to protest. The principal reasons are uneconomic prices for farm produce and stagnant wages of farm labour. For the few crops that have an MSP, the MSP is not adequate and the annual increases have been niggardly. Every farmer knows that the promise of MSP = Cost + 50 per cent is a jumla,” he said. 3. Rising fuel prices
4. Joblessness
Raising the issue of unemployment, the former finance minister said, “Joblessness is rampant. The only reliable data is the quarterly survey of the Labour Bureau.
5. Punctured tyres of economy
Chidambaram also added that three of the four tyres of economy have been punctured. “Firstly, exports – the growth rate in the last four years has been negative. Secondly, private investment is in the the doldrums, if not dead. Capital Formation (GFCF) is stuck at 28.5 per cent for three years. Lastly, private consumption which was limping until a few months ago, has a mild uptick.
6. Growth rate declined post-demonetisation
Talking about the much-hyped note ban exercise of the Modi govt, Chidambaram said, “The adverse effects of demonetisation have been established beyond doubt. The growth rate has declined from 8.2 per cent in 2015-16 to 6.7 per cent in 2017-18 —exactly 1.5 per cent as I had predicted and endorsed by Dr Manmohan Singh.”
8. Gross NPAs have risen in last four years; Banks Board Bureau is an utter failure: Chidambaram
Gross NPAs have risen in the last four years from Rs 2,63,000 crore to Rs 10,30,000 crore and will rise more. 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.
9. Inflation
Referring to the recent hike in the RBI repo rate, Chidambaram said, “Inflation expectations are high. Interest rates will rise throwing more burden on consumers and producers.”
10. Social security schemes ignored, says Chidambaram
Adding that the government has repeatedly neglected social security laws and programmes, Chidambaram said the Health Protection Scheme announced by the Centre in its budget is “another jumla”. “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,” he said. (Agencies)