Far from offering signals of unity at a time when the economy seem to faltering, the political debate on a plummeting rupee continued to send a message of extreme divergence between the Opposition and the government on Wednesday.
As the current downslide is driven a lot by sentiment, the political rabblerousing may aggravate the negative mood. When many are fearing that the currency would fall further because of war clouds over Syria, flight of hot money and market concerns about the food bill widening the fiscal deficit, leaders from the BJP and the left did not miss a chance to hit out at the UPA government and paint a dark picture for the coming days.
“I have been saying that the only thing that will stabilise rupee and market at this point of time is for the government to resign and go for fresh elections,” senior BJP leader and former finance minister Yashwant Sinha said.
CPI leader Gurudas Dasgupta even likened the situation to an “economic emergency”. BJP leader Ravi Shankar Prasad said the economy was “on ventilator in the ICU”.
“Dollar strengthening is actually the rich parking their money in foreign currencies because they seem to have lost faith in Indian economy,” CPI (M) leader Sitaram Yechury said. “What is required is to stop these incentives for the rich. You (UPA) are giving these incentives of more than R5-lakh crore every year in terms of tax concessions. These incentives are making the rich park their money in gold, forex and real estate.”
BJP spokesperson Prakash Javadekar also blamed the government. “If the government would have taken timely action on the import-export front and would have done massive public investment in infrastructure, the health of the economy would have been better,” he said. “The country and its people will have to pay for the follies of this government. There will be all round price rise and millions will lose jobs and the common man will suffer.”
Making a veiled remark on enhanced public expenditure to implement the proposed Food Security Act, Prasad said, “In this scenario you keep doing reckless expenditure and populist measures. These will only aggravate the problem.”
Finance Minister P. Chidambaram, speaking in parliament on Tuesday had said more reforms was the way to go to revive the economy hit by a web of economic problems including a free-falling rupee and a crippling industrial slowdown.
Replying to a debate on the state of the economy in the Lok Sabha, Chidambaram had listed out ten steps including promoting of manufacturing sector and exports to boost faltering growth, which needs to be raised to its potential rate of 8%.
India’s economy grew by 5% in 2012-13, the worst in a decade.
“If we are patient, firm and clear headed and once we take these steps, the economy will begin to turn and we will be able to build a strong economy,”
“We have to find a way to resolve the impasse in the coal sector, iron ore sector, environmental clearances, land acquisition which has come under judicial intervention.