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Criticising the Economic Survey, which was tabled in Parliament on Monday, for having “failed” the people, the Opposition Congress said the Indian economy would need a miracle to achieve the growth rate of 6.75 per cent in 2017-18 . The party said the Survey created grounds for almost certain economic failure overall, because it was based on premises which were questionable.
Former finance minister P Chidambaram said the future success of the economy was based on two conditions that were shaky: The world economy would hold, and oil prices would hold. Neither premise, he said, looked stable.
According to him, the Narendra Modi government admitted it has failed to meet challenges in education, employment and agriculture. It also conceded progress on toilets, Jan Dhan, LPG connection and village electrification was inadequate and has not resulted in tangible outcomes, he said.
Chidambaram said: “The Survey admits to the two underlying macroeconomic vulnerabilities — fiscal deficit and current account deficit and hints at slower consolidation. This admission belies the government’s claim of ‘sound macroeconomic fundamentals’.” He added that the government’s reliance on private investment and exports suggested it has given up.
Randeep Surjewala, spokesperson for the Congress, said the Survey lowering GDP growth forecasts to 6.75 per cent was an admission that there might be a further downside due to demonetisation. The construction sector, which employs over 40 million workers, most of whom are migrants from the farm sector who have returned dispirited to the villages, he claimed.
“Despite over 60 per cent spurt in MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) demand post-demonetisation, 19 states have a negative balance on MGNREGA funds as the central government failed them on this count too,” Surjewala said.
Surjewala also pointed to the “covetous eye” being cast on the Reserve Bank of India (RBI) — in a section on “Excess Capital with the RBI” on page 99, the Survey makes a renewed case for the RBI transferring Rs 4 trillion to the government. It suggested that this be used either to address non-performing assets (NPAs) and stressed assets or to retire a portion of the national debt.
Surjewala said this money was expected to be the windfall from demonetisation and when it did not fructify, the government wants the RBI to make good the fiscal gap. “This is the RBI’s capital, which it deploys to stabilise the rupee as also our economy. Through the Economic Survey, the Modi government is seeking ‘intellectual cover’ for its sinister design to utilise the RBI’s capital to bail out a handful of crony capitalists from the NPA mess” he said.
He said the nation had a lot to worry about with rising oil prices, no private investment and limited government investment.