The BJP-led government on Wednesday decided not to draw the battlelines in the debate over the economy after it was strongly attacked by its senior leader and former finance minister Yashwant Sinha.
Sinha, in an opinion piece published in The Indian Express Wednesday, wrote that the economy is in a downward spiral, its revival unlikely by the 2019 elections and a “hard landing appears inevitable.” Writing that it was his national duty to “speak up now,” against “the mess the Finance Minister has made of the economy,” Sinha claimed that his views were shared by many people in the party who were “not speaking up out of fear.”
The party declined to counter Sinha’s views but Union Railway Minister Piyush Goyal told ANI that India has become the world’s fastest growing economy under Modi government in the last three years. “The whole country and the world has seen that under the decisive leadership of Prime Minister Modi, India has become the world’s fastest growing economy for three consecutive years in a row. For the first time in the Indian history, India is driving world growth at all levels,” Goyal said.
Indeed, sources said, the leadership had taken a call that Goyal would issue a statement defending the government’s economic policy while others should refrain from making comments.
“If you see, some of the landmark reforms that this government has brought in are unprecedented — something like GST, which was never imagined possible in a country of the size and scale of India. In fact, we are the largest country in the world to have implemented GST…The kind of structural changes we have brought in different aspects of economy, different aspects of government’s working, breaking the silos within different departments and working as one strong entity with the steadfast purpose of serving the poorest of poor. The poorest of the poor is in the focus of every action of this government,” Goyal said.
Earlier in the day, addressing a press conference to brief reporters on Cabinet decisions, Home Minister Rajnath Singh, when asked about Sinha’s piece, said: “The whole world admits that India is the fastest growing economy in the world. No one should forget this fact. In the matter of economy, in the international arena, India’s credibility has been established,” he said.
Asked about Sinha’s scathing critique, a top government functionary said that the economy has held firm in the prevailing global economic situation. “The one situation we are still dealing with is the banking crisis,” he said. “But this is a situation we have inherited from the previous government. We expected a pro-active role from the RBI in dealing with it but it hasn’t been as forthcoming as is necessary,” the government official said.
At its national executive held on Monday, the BJP, under criticism from the Opposition on the slowdown and lack of jobs, tried to allay fears by asserting that the government’s steps would pave way for brighter days before 2019. The party resolution, BJP chief Amit Shah’s speech and Prime Minister Modi’s concluding address focused on the promise of a clean corruption free and transparent economy.
But Sinha’s piece came within 48 hours of this. Warning of a raid raj, he said that “instilling fear in the mionds of the people is the name of the game.” He alleged that the ill-planned GST and demonetisation exercises had played havoc with the economy. The growth rate of 5.7 per cent, he said, is actually 3.7 per cent or less, if one factors the change in methodology introduced in 2005. He also cautioned that rural distress could worsen as troubles with cash flow and farm debt would grow.
But Goyal said that no other government had taken initiatives for reforms as strongly as the Modi government had in three years. “I think this kind of massive structural reforms, landmark reforms…and along with that, have given this nation one of the cleanest governments ever. Scam free clean govt ..in three years brought in an image of India — both within India and internationally – of a government that can work honestly, that can work for the welfare of the poorest of poor and in many ways a government that, for the first time in the history of India, attacked black money, attacked corruption as never before.”
Party sources said that Sinha’s criticism “shocked” the party leadership. It is expected to add ammunition to the Opposition’s attack. “The timing doesn’t suit us becuase the party leadership is struggling to address concerns of the cadre and state leaders complaining about jobs and the sense of despair,” said a BJP leader adding that the party leadership “genuinely believed things are not so bad in the interiors where people started getting the benefits of its wide range of programs.”
Some sources in the government read Sinha’s piece as betraying his bitterness over not being asked for advice.
However, the party has decided “not to add fuel to the fire” and left defence to the ministers, although its spokespersons rejected the criticism. “Anyone who assesses the economic performance of this government dispassionately will realise that our performance has been very strong and promising,”said BJP national spokesperson G V L Rao.
A top party leader, in this context, also suggested that party has yet not applied its mind whether to act against Yashwant Sinha. “He (Yashwant) is virtually out of practical politics. He may technically be in the BJP but so are many others,” said a top BJP leader.
Even the government appeared reluctant to wade in. “The Government of India does not respond to every column of opinion,” was how a top government functionary told The Indian Express when asked about the government’s reaction to Sinha’s piece. “Do you think we should respond? We don’t have to,” was how another senior government official responded.