Jayant Sinha takes on father Yashwant; defends Modi's economic policies

Jayant Sinha argues critics have missed the fundamental structural reforms that are transforming the economy

A day after senior BJP leader Yashwant Sinha hit out at Finance Minister Arun Jaitley for creating an economic mess, his son and Union minister, Jayant Sinha, has defended the government's economic policies, stating that it is undertaking structural reforms that are "necessary to create a 'New India' and provide good jobs for our billion-strong workforce".

In a Times of India blog post, Jayant wrote that stories on the challenges faced by the Indian economy are "conclusions drawn from a narrow set of facts".

"They have simply missed the fundamental structural reforms that are transforming the economy," he said.

Here is how he defended the Narendra Modi government:

1) The Union minister argued that one, or two, quarters of GDP growth were quite inadequate to evaluate the long-term impact of the structural reforms underway.

Former finance minister Yashwant Sinha, for his part, has said, "For quarter after quarter, the growth rate of the economy has been declining until it reached the low of 5.7 per cent in the first quarter of the current fiscal, the lowest in three years.

And please note that the methodology for calculation of the GDP was changed by the present government in 2015 as a result of which the growth rate recorded earlier increased statistically by over 200 basis points on an annual basis. So, according to the old method of calculation, the growth rate of 5.7 per cent is actually 3.7 per cent or less."

2) Jayant Sinha said, "The new economy that is being created will be much more transparent, globally cost-competitive, and innovation driven. Importantly, the new economy will also be much more equitable thereby enabling all Indians to lead better lives."

His father, however, has said that while 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.

3) The younger BJP leader also said that GST, demonetisation, and digital payments were game-changing efforts to formalise India's economy. 

Contrary to his son's defence of the Modi government, Yashwant Sinha has argued that "demonetisation has proved to be an unmitigated economic disaster, a badly conceived and poorly implemented GST has played havoc with businesses and sunk many of them and countless millions have lost their jobs with hardly any new opportunities coming the way of the new entrants to the labour market."

'Reforms 3.0 are dramatically transforming India’s economy'

In another ToI blog post published in June this year, Jayant Sinha wrote: "Reforms 3.0 are dramatically transforming India’s economy and in the long term will position it to be a globally competitive, innovation-driven economy. Six structural reforms have already been accomplished: (1) ending discretionary allocations of public resources; (2) massive formalisation of the economy; (3) sweeping changes in India’s fiscal policies; (4) an entirely new method for setting monetary policy; (5) moving from a bank-led to a more equity-led financing approach; and (6) a revolutionary set of social security programmes. Each of these is a macro-level change impacting virtually all sectors and industries."

Chidambaram reacts to Jayant Sinha's defence

Former finance minister and Congress leader P Chidambaram, who had applauded Yashwant Sinha on Wednesday for speaking "truth to power", has criticised Jayant Sinha's article as reading "like a PIB release... he should know administrative changes are not structural reforms".