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Wednesday, Sep 18, 2019

‘Economy in free fall but govt praising itself’: Yashwant Sinha in fresh attack

Yashwant Sinha’s stinging criticism of the Modi government’s economic policies have sparked a war of words between the senior BJP leader and ministers.

india Updated: Sep 29, 2017 11:24 IST
HT Correspondent
HT Correspondent
Hindusn Times, New Delhi
BJP leader and former finance minister Yashwant Sinha has accused the Modi government of rushing through poorly planned economic reforms.
BJP leader and former finance minister Yashwant Sinha has accused the Modi government of rushing through poorly planned economic reforms.(Hindustan Times file photo)

Former finance minister and senior BJP leader Yashwant Sinha has hit out the Narendra Modi government again, saying it refused to acknowledge the downturn in the Indian economy and “kept singing praises of themselves, patting their backs”.

Sinha’s attack was the latest in his tirade against the government which has also seen his son and Union minister, Jayant Sinha, come out in defence of the Modi government and finance minister Arun Jaitley.

In a stinging rebuttal to Jaitley’s comments that Yashwant Sinha was a “job applicant at 80”, the former finance told Indian Express in a lengthy interview which appeared on Friday, “If I was a job applicant, he (Jaitley) would not be there in the first place”.

Yashwant Sinha’s criticism of the government came after official data showed India’s economic growth sliding to a three-year low in the last quarter, prompting the Opposition to criticise the government for disrupting business activity through demonetisation. Gross domestic product also grew at just 7% in April-June, its slowest pace since the January-March quarter 2014.

Sinha wrote a hard-hitting article in the Indian Express on Wednesday criticising the government’s economic policies, saying that demonetisation proved to be an “unmitigated economic disaster” and that the Goods and Services Tax (GST) was a “badly conceived and poorly implemented” havoc.

The next day, his son Jayant’s write-up appeared in the Times of India in which he appeared to be countering his father’s views, saying that “several articles...draw sweeping conclusions from a narrow set of facts, and quite simply miss the fundamental structural reforms that are transforming the economy”.

In his latest interview, Yashwant Sinha said the government “completely misread the situation and kept chipping away at the margins, instead of attacking the problem at its roots”.

“And that’s the reason why, year after year, even in this regime, bank NPAs (nonperforming assets) have been going up. In this situation, the first thing that should have been done was to stop the growth of bank NPAs and then deal with them,” he said.

He added that “40 months down the line, you cannot hide behind the (argument) that these are legacy issues”, an apparent reference to the Modi government’s frequent claims that some of the problems in the economy were due to alleged wrong policies of the previous Congress-led regime.

He also rubbished the government’s claims of “structural reforms” to shore up the economy.

“First, I don’t consider demonetisation as a reform at all...It was an administrative measure, and all the objectives of demonetisation — they appeared as having failed... The entire black money is back in the system. So demonetisation, apart from disrupting the economy, has made no other contribution,” he added.

In a question on how he foresaw the economy, Sinha said there was very little prospect of big changes before the general elections in 2019, which many expect will test Modi’s popularity after his overwhelming victory in 2014.

“They have one budget. Next year’s budget will be the last regular budget of this government, and the 2019 budget will only be vote-on-account. And whatever they do in the budget of next year will take its own time to produce results. So I don’t see results being produced before the election of 2019,” Sinha said.

“Employment is the most important thing . The economy must grow, private investment must come, the demand in the economy must go up to absorb the present capacity, leading to the creation of fresh capacity.”

He also asserted that his criticism was not a “father-son” fight in light of Jayant Sinha’s write-up.

“Putting Jayant against me is an attempt to obfuscate issues. I can also get personal. But I won’t fall into that trap,” he said.

“My simple reaction is that it is not a father-son issue, it is not a family issue with Jayant on one side and I on the other. That is not a national issue and, therefore, if anyone is trying to debase it or turn it into a family issue it should be condemned,” he added.

In reply to another question, the senior BJP leader said he was aware of the potential threat to his son’s political career.

“If it is a question of national interest, other interests become insignificant. And if there is a collateral damage to his career, so be it” he added.

Yashwant Sinha’s no-holds-barred criticism of the government has been welcomed by opposition parties which have been very critical of Modi and Jaitley over GST and last year’s demonetisation move when the government culled 500 and 1000-rupee notes. The exercise pulled out 86 of the currency notes in circulation at that time.

Last week, the Organisation for Economic Cooperation and Development scaled back its economic growth forecast for India to 6.7 percent for the 2018 fiscal year, down from 7.3 percent predicted earlier this year. Other organisations and banks have made similar downward revisions.

Economists say the country needs to maintain 8 percent growth to add enough jobs for some 12 million young people joining the work force every year.

(With agency inputs)

First Published: Sep 29, 2017 11:08 IST