FORMER FINANCE minister P Chidambaram on Saturday lashed out Modi government, saying demonetisation and introduction of the Goods and Services Tax (GST) have destroyed the country’s economy, forcing small and medium business to shut down. Interacting with businessmen in Rajkot, the senior Congress leader said demonetisation was not a bold step, but a reckless one. “What’s a bold step? A farmer who commits suicide is also taking a bold step. Do you welcome it? Committing suicide also requires courage. I call it rash, reckless and adventurous step. You call it bold and beautiful. But the point is it has destroyed lives. For nearly two to three months, millions of people stood and waited in queues to exchange their (currency) notes. Nearly,140 people lost their lives. Carpenters, rickshaw pullers, plumbers who depend on daily earning in cash went without business for two months. Demonetisation was a foolish step,” Chidambaram said at an event named Samvad, which was organised by a local Gujarati newspaper.
Chidambaram also took a dig at the government, saying the note ban has failed to achieve all its stated objectives like putting an end to black money, curbing terror funding etc. “There is nothing like black money but merely income which is taxed and income which is taxable but escapes tax net. There is a shadow economy (in India) but there is shadow economy in every other country. India’s shadow economy that is transactions that don’t come under tax net is around 12 per cent. But that’s average for Europe also. There are many European countries which have shadow economy of more than 12 per cent. Even America has around eight per cent shadow economy. What is shadow economy? It is income that your tax system is not able to capture. The answer to shadow economy is to make your tax system more efficient. If you put cruel rates of tax, people will avoid it. People will say why should I pay… If you make friendly tax system, they will pay. The answer is not demonetisation. It’s like saying there is a mosquito in my house, I am going to burn my whole house,” he said.
He added that the introduction of GST in its present form has destroyed small and medium business as requirement for online filing three returns online per month had forced them had forced them to shut down. He said these businesses were job-creators. “If you invest Rs1 crore in big business it won’t create jobs. But small and medium businesses which create jobs are struggling for survival. Therefore, they are not hiring and no jobs are created,” he added.
Chidambaram also claimed that the demonetisation and the roll-out of GST had dealt a severe blow to the economy, sending it into a downward spiral. However, he said, the government maintains that the economy is in fine fettle. “Day before yesterday, the Finance Minister (Arun Jaitley) said the Indian economy is on strong micro economic fundamentals. And the finance secretary said it was growing at 7.5 per cent, between 2014 and 2017. Why are they announcing Rs 5 lakh crore Bharatmala? Why are you announcing bank recapitalisation all of a sudden. In your heart, you know things are not good. In the last six quarters, the growth rate has gone down from 9.1 per cent to 5.7 per cent. This means a drop of 3.4 per cent,” said the Congress.
The former finance minister opined that it was possible to overcome the situation by “taking right steps and not taking wrong steps”. He said that he has faith that there are people in the country who can take right steps. “The growth rate must not go down below 5.6 per cent. India doesn’t deserve growth rate below 5.7 per cent, and it is possible to take it up by taking right steps and not taking wrong steps. But for that to happen, the government must acknowledge that they committed a mistake by demonetisation and GST. There are people in this country who can do this. Government must hire from outside to correct the mistakes. Those in government can’t do it as they are the ones who have committed the mistakes,” Chidambaram added.
He claimed that 1,326 farmers committed suicide in Gujarat over the last four years. “There are no jobs today. Jobs will be created only if small and medium businesses grow. To help them grow, small businesses should not require to register. Medium businesses must register but they should be given right to self-certification,” said the Congress leader. He said the government was talking about vikas (development). “People talk about growth. Growth is necessary. But what is the use of rojgar-mukta vikas (development sans job creations)” he asked.
The Congress leader also accused the NDA government of misplaced priorities. “They will invest Rs1 lakh crore on bullet train between Mumbai and Ahmedabad. How many people will travel in it. Around 300 or 400? Can’t we give Rs1 crore to each school so that new buildings are built, toilets are built, teachers are hired. Our priority is education, health, employment,” he said.