Unpromising and Barefaced Answers of Chidambaram

BJP MP Shri Yashwant Sinha’s 18 questions on the present state of economy are proving to be the kind of questions akin to YAKSHYA PRASHNAS to which Chidambaram has no clue and thus is beating around the bush. BJP has raised very valid and pointed questions on the state of economy and has also based its campaign on these issues. However, Chidambaram has brazenly brushed aside the pithy questions and indulged in same old rhetoric bordering on arrogance. Perhaps the party, to which the present FM belongs, by not responding to the pointed questions, has only admitted the charges alleged by Mr. Sinha. To be more specific the following analysis reveals the above theory.

(a)   GDP growth rate crashed to 4.6 percent, mounting inflation restricted the household necessities, and slump in the industrial sector witnessed trimmed down investments and lessened prospects for the increasing workforce. The questions asked by the BJP leader have finally been answered; however it was sad to notice the vague and dubious rebuttals from a person who is in-charge of the economy of the nation. Yashwant Sinha had questioned the caliber of Chidambaram, who according to Sinha has proved to be the most unproductive finance minister of all times.

(b)   Plus, Sinha charged the FM with the allegation of being responsible for the ever-declined GDP and intolerable fiscal deficit. The charges included infrastructure drawbacks, downfall of rupee, losses incurred as a result of subsidies, and unbearable price hikes. Sinha questioned the potential of the Finance Minister who inherited a healthy economy delivered by the NDA with growth rate of 8 percent. Let’s take a sneak peak as to what Chidambaram has claimed in his defense.

(c)    To start with, Chidambaram claimed to have contained inflation and fiscal deficit. It is vital to note here that the original cost of 738 significant projects monitored by the Ministry of Statistics and Programme Implementation, which was INR 9.05 lakh crore has now mounted to INR 10.79 lakh crore, the reason being inflation. Also, the government has been blaming the global slowdown for the dip in the growth; however the deputy chairman of the Planning Commission, Montek Singh Ahluwalia spoke about the domestic factors in the same context at World Economic Forum in January this year.

(d)   Next, Chidambaram claimed to have controlled the current account deficit which would likely be USD 35 billion for the FY 2014. Herein, it shall be noted that the current account of India reached an all-time high of USD 7.36 billion in 2004, while fell to – USD 31.86 billion in 2012. It is tough to understand as to what control Chidambaram is claiming to have attained. Lastly, the FM reiterated his 10-points agenda that he emphasized in Vote for Account 2014 speech. Did he forget that he misinterpreted the environmental standards and vulnerability of rupee that resulted in the widening of deficits?

(e)    The facts and figures are no way in consensus with the words of P Chidambaram. As per the certified Economic Survey for the FY 2012-13, the restraint in growth is chiefly linked with the slump in the industrial sector which registered a discouraging growth rate of 3.5 percent in 2011-12 and 3.1 percent in 2012-13. Definitely, the approach of the UPA-led government was unjustifiable as booming of investments was never thought about.

(f)     The economy during the UPA regime has delivered insecure jobs to limited workforce, dysfunctional public health and education system, paucity of infrastructure (roads, railways, ports, water supply, power, and sanitation), banking sector that is prone to loan defaults due to delayed projects and condensed growth, range of inefficient programmes with high stress and limited benefits (food security, rural employment guarantee etc.), and stagnation in the manufacturing output despite the availability of cheap labor.

(g)   It is known to all that post the Lok Sabha polls, the next challenge for the new government will be the paralyzed economy. Surely, the analysts are talking about the shift of governance to new hands; however the prime concern remains the economic collapse. The industrial sector is waiting for better investments and bull in the share market, while households are expecting trimmed down interest rates and inflation. Reliable answers to these concerns are still on their way and we can look forward to solutions in case the Modi-led union government comes into the picture.

Let’s also take a sneak peek into what the situation was during the NDA rule.

(h)   8.06 percent was the GDP growth for the FY 2004, which has declined to 4.96 in the FY 2013. In the same context, the agricultural growth rate, industry growth rate, and services growth rate were 9.05, 7.32, and 8.06 percent respectively in FY 2004, which fell to 1.79, 3.12, and 6.59 percent respectively in the FY 2013. The inflation rate (WPI) was 5.5 percent in FY 2004 which stretched to 7.8 percent in FY 2013. Significant to note, 8.4 million employment opportunities were added per year from 1999-2002 as compared to 3.9 million per year from 1993-1999. Also, the tenth five-year plan (2002-2007) had an outlay of INR 42850 crore for education, which was 1.7 times of the previous five-year plan.

(i)     Another noteworthy accomplishment was the construction of houses under the Indira Awaas Yojana. While only 53.29 lakh houses were built during the period, 1985 to 1998, the figure was 54.62 lakh new houses during the period, 1999-2004. Also, 61 percent increase in the GDP was realized in the FY 2003 as compared to the FY 1998 (INR 22,36,128 crore in 2003 as compared to INR 13,90,148 crore in 1998). In 2001, the literacy rate witnessed an unexpected rise to 65.5 percent, which was 52.2 percent in 1991. Figures are undoubtedly in favor of the NDA-led government and hence are appropriate to substantiate the caliber and vision.

It is clear from the above that after having inherited the robust economy from the previous regime of NDA, the present FM has decimated it to such an extent due to unsustainable and unproductive schemes and spending that the new government which will shortly enter the office will find the coffers empty and a sick economy. It is for the first time during the reign of the present Government that this country has faced a serious threat of sovereign downgrade. Despite that there is no remorse on the face and conduct of the present FM for his incompetence. This is really blatant. 

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