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BJP govt's step to boost economy are 'half-baked and half-hearted': Cong

Press Trust of India  |  New Delhi 

The Sunday dubbed as "half-baked and half-hearted" the steps announced by the BJP government to boost the economy and said they reflected the "bankruptcy" in its economic vision and they will have an adverse impact.

said the last ditch attempt by and Minister to check rupee devaluation and control the current account deficit (CAD) reflects the bankruptcy of economic vision of 'Modinomics' that has failed India's economy.

"Half-hearted, half-baked and feeble measures announced by the minister, after a meeting chaired by the prime minister, reflect the myopic and parochial economic vision of a government caught in a web of its own making," he alleged in a statement.

"The measures are superfluous, parochial and would not have the desired impact, except for taking the country to pre-liberalisation era. Their impact would be adverse on economy," he claimed.

The claimed the falling Rupee and uncontrolled were a "failure of 'Modinomics'" which had "utterly failed" to take stock of the country's economy.

He said India's current account deficit (CAD) has widened to a four-quarter high 2.4 per cent of (GDP) in the April-June quarter of 2018-19 from 1.9 pc in the January-March quarter of 2017-18.

The 'Merchandise Trade Imbalance' is also expected to rise to USD 188 billion in Financial Year 2018-19, compared with USD 160 billion in Financial Year 2017-18 (SBI Report), he said.

The trade deficit has jumped to USD 18 billion in July 2018 on account of falling export performance, he said.

The net outflow of portfolio investments from in first quarter of 2018-19 was USD 8.1 billion, as against a USD 2.3 billion inflow of portfolio investments in the fourth quarter of Financial Year 2017-18, reflecting no-confidence in Modi government's economic policies, the Congress claimed.

"A 'flawed GST' and demonetisation 'disaster' have adversely impacted and de-motivated global investors.

"Do the and minister even comprehend that the 'net estimated cost' impact of rupee depreciation ('71-72 level) on India's economy in second half of 2018-19 fiscal is Rs 1,44,000 crore?," he asked.

Surjewala alleged this has led to a liquidity crunch in the financial system.

He said post-demonetisation, it was expected that cash in banks will reduce interest rates. However, the country's largest banks, including the State Bank of India, etc. are raising lending rates making capital costly for the common man.

The Congress also said the is silent on the 'fuel tax' cut and inflation remains high for the common man on account of Rs 11 lakh crore worth of such taxes due to central excise on petrol and on diesel, besides a multi-fold increase in custom duty.

On the Modi government's review of mandatory hedging conditions for infrastructure loans, he said when there is continuous depreciation of Indian rupee against the US dollar, it is doubtful if any borrower will be interested in an unhedged product.

On permitting companies to avail of ECBs up to USD 50 million with a minimum maturity period of one year, he said due to increase in NPAs for over four years under the Modi government, banks are refusing to finance and infrastructure companies and hence Indian companies have to look for external commercial borrowing (ECB) option.

On the exception of masala bonds from withholding tax for issuances up to March 31, 2019, the Congress leader asked why this option been restricted till March 2019.

"Is this an attempt to provide a limited window to certain foreign investors to bring hot money into Indian economy for speculative purposes?," he asked.

Surjewala said the should learn from the UPA-Congress which took fundamental steps during the economic downturn to insulate the economy.

"Unfortunately, the of has failed it from travelling beyond headline management measures," he claimed.

The government announced Friday an array of steps, including removal of withholding tax on Masala bonds, relaxation for FPIs, and curbs on non-essential imports, to contain the widening and check the rupee fall.

The decisions were taken at a meeting chaired by Modi to review the prevailing economic issues.

He was briefed by Urjit Patel, and top officials of the on the health of the economy.

These measures are likely to have a positive impact to the tune of USD 8-10 billion, a top said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, September 16 2018. 19:10 IST