Former finance minister Yashwant Sinha, now a dissident voice within the Bharatiya Janata Party (BJP), has spoken out against the way his own party has, apparently, dented India’s economy. In a recent column, 'I need to speak up now', written for The Indian Express, Sinha has said that many in the BJP know that the economy is on a downward spiral, but they are not speaking up due to fear. In one of the most scathing criticisms, Sinha said the distress in the economy was so deep that a revival was unlikely before the next general elections, and he also warned of a hard landing.
In hard-hitting words, Sinha said, "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."
What is the picture of the Indian economy today?
Private investment has shrunk, industrial production has collapsed, agriculture, real estate are in the doldrums, the service sector is in a slow lane, exports have dwindled. In short, according to Yashwant Sinha, the entire Indian economy is under stress.
Reasons for this decline have been allowed to accumulate over time to cause the present crisis, he said.
Here are five reasons why Yashwant Sinha believes the economy is on a downward spiral:
1. Arun Jaitley, the brightest star in the NDA govt: The finance minister's indispensability was established further when the prime minister rewarded him not only by giving him the finance ministry, including the department of disinvestment, but also the ministries of defence and corporate affairs. Four ministries in one go out of which he still retains three. "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 24x7 job. Naturally, even a superman like Jaitley could not do justice to the task", said Yashwant Sinha.
2. Monsoon: Weak monsoon will further intensify rural distress, he said. The agriculture ministry has estimated foodgrain production at 134.7 million tonnes for the 2017-18 kharif crop season, 2.8% lower than last year. So far, the monsoon has seen a deficit of just 5% compared to the 50-year average, but data from the India Meteorological Department showed that till Sunday, about 212 of the 630 districts in India from where data is received daily, have seen deficit rains of at least 20% compared to normal, while 100 districts have seen excess rains of 20% or more compared to normal.
Patchy rains in parts of India were also accompanied by floods leading to loss of lives and crops in Gujarat, Assam, West Bengal, Bihar and Rajasthan.
3. Raid Raj: "While the BJP protested against raid raj, it has now become the style of functioning of the finance ministry. After demonetisation, the income-tax department has been given the responsibility of investigating hundreds of thousands of cases involving the fate of millions of people. The Enforcement Directorate and the CBI also have their plates full," according to Sinha.
In a controversial tweaking of the Income Tax laws, the government had in February this year legalised tax raids on people based on mere suspicion, unsubstantiated rumour, or plain whim.
"India has experimented with a “Raid Raj” before and it's led only to corruption, harassment of ordinary citizens and the targeting of political enemies", said a Bloomberg report.
4. GDP growth:
According to him, the GDP growth
for April-June as per old method of calculation will be 3.7 percent or even less, not 5.7 percent as the government data shows.
India’s GDP grew at 5.7% between April to June this year — the slowest pace recorded in 13 quarters or since the NDA government assumed office in May 2014 — led by a sharp decline in industrial activity that officials ascribed largely to an inventory drawdown by firms ahead of the rollout of GST
from July 1. Finance Minister Arun Jaitley
acknowledged that the growth numbers for the first quarter, which were lower than what most analysts expected, are certainly “a matter of concern”.
Listing out the problems the economy faces, Sinha has said that "demonetisation
has proved to be an unmitigated economic disaster, a badly conceived and poorly implemented GST
has played havoc". This has resulted in millions of job losses and even sunk businesses.
Earlier this year, Sinha had suggested that the regime that has been unable to live up to its promise of job creation in relation to the Vajpayee government could end up disappointing the aam aadmi, more so in the wake of demonetisation.