A day after senior BJP leader Yashwant Sinha slammed the Modi government in a stinging Op-ed in The Indian Express, Finance Minister Arun Jaitley defended the government policies saying they are aimed at ending corruption.
Speaking at a book launch event in New Delhi, Jaitley said: “I must confess that I do not have the luxury as yet of being a former finance minister. Nor do I have the luxury of being a former finance minister who has turned a columnist.”
Without naming either Sinha or Congress leader P Chidambaram, Jaitley said: Being a former finance minister “I can conveniently forget a policy paralysis (during UPA-II). I can conveniently forget the 15 per cent NPAs of 1998 and 2002 (during Sinha’s term as finance minister). I can conveniently forget the USD 4 billion reserve left in 1991 and I can switch over and change the narrative.
“Acting in tandem itself wont change the facts,” he said as he took a jibe at Sinha for seeking a job by making those comments.
“Probably, a more appropriate title for the book would have been ‘India @70, Modi @3.5 and a job applicant @ 80.”
Jaitley also rejected the notion that the economy is in a downward spiral as suggested by Sinha. He mentioned the figures of tax collection to substantiate his claim of a strong economy. “Direct tax figures are 15.7% over and above last year’s figure, so this so-called slowdown visualized by some, hasn’t even impacted,” said Jaitley.
On why growth in the private sector has slowed down, Jaitley said some harsh steps were taken to control the effects of the “reckless lending” that took place during the UPA era.
“Today the challenge really is during the boom period of 2003 to 2008-09, our private sector expanded when global economy slowed down. Private companies had undertaken large liabilities from bank, did not find demand. When global commodity prices went down, many of them did not find their loans serviceable.
“Then came a situation in 2012-14 when the governmet virtually gave up, there was no policy initiative, they allowed things to drift on their own. When you allow this, the figure (NPAs) mounted up. I must say that those in government, those in banking industry, those in RBI, when reckless lending took place, all looked the other way.
“Then suddenly some harsh steps were required. so debate is are all those steps taken a bit too harsh. Bankers believe the steps with regard to excessive provisioning are a bit too hard on them. therefore the private sector area itself was one area we have not grown…several areas of private sector have grown.
“Large industry is borrowing more from the bond market than the banks itself. that is the problem that needs to be addressed by us.
Talking about the criticism against demonetisation, Jaitley said it “one of the smoothest possible replacements of currency itself.”
“People saw riots would begin, starvation would take place,. It was one of smoothest possible replacements of currency itself,” he said.
He also said that the note ban targetted the shadow economy.
“Demonetisation was to make sure that the anonymous tender which operated in market gets identified to its owner. The prime minister has a strong agenda on creating a new normal as far as countery’s shadow economy was concerned,” said Jaitley at a book launch event.
The minister added that the government is serious at checking the improper political funding. He added that illegtimate political funding has corrupted the society and tarnished the country’s image globally.
In a scathing Op-ed in the Indian Express on Wednesday, Yashwant Sinha slammed the Modi government saying ‘the economy is on a downward spiral’ and blamed Finance Minister Arun Jaitley for “the mess the finance minister has made of the economy”. He wrote: “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.”
“Private investment has shrunk as never before in two decades, industrial production has all but collapsed, agriculture is in distress, construction industry, a big employer of the work force, is in the doldrums, the rest of the service sector is also in the slow lane, exports have dwindled, sector after sector of the economy is in distress, 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,” wrote Sinha.