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Tuesday, January 21, 2020

Govt clueless on economy, look at numbers: Chidambaram, day after

Asked about his 106 days in prison, he said: “Sleeping on a wooden board without a pillow strengthens your neck, spine and back.

Written by Krishn Kaushik | New Delhi | Updated: December 6, 2019 5:03:33 am
‘My spine, neck and head stronger’. Anil Sharma

A DAY after his release from jail, Congress leader P Chidambaram launched an aggressive attack against the Centre on the state of the economy, saying that the BJP-led government was “clueless” and Prime Minister Narendra Modi had left it to his ministers to indulge in “bluff and bluster”.

Asked about his 106 days in prison, he said: “Sleeping on a wooden board without a pillow strengthens your neck, spine and back. My spine is stronger, my neck is stronger and my head is stronger.” He refused to comment on the cases against him, saying the matter was sub-judice, but added that “my record as minister and my conscience are absolutely clear”.

The Supreme Court’s “clear and comprehensive” order, granting him bail in the INX Media case, would “clear the many layers of dust that have unfortunately settled on our understanding of criminal law and the manner in which criminal law has been administered by our courts,” he said.

Addressing a press conference, the former Finance Minister focussed on the economy instead. “Nothing sums up the state of the economy better” than the GDP growth figures for the last six quarters — 8, 7, 6.6, 5.8, 5 and 4.5, he said. “We will be lucky to end the year if growth touches 5 per cent,” he said.

“Even after seven months into the fiscal year, the BJP government believes that the problems faced by the economy are cyclical,” he said. Calling the government “wrong” and “clueless”, Chidambaram said it was “unable to look for the obvious clues because it is stubborn and mulish in defending its catastrophic mistakes like demonetisation, flawed GST, tax terrorism, regulatory overkill, protectionism, and centralised control of decision-making in the PMO”.

He said Modi “has been unusually silent on the economy”, and “left it to his ministers to indulge in bluff and bluster”. “The net result, as The Economist put it, is that the government has turned out to be an ‘incompetent manager’ of the economy,” he said.

Criticising the government for calling the slowdown “cyclical”, he said, “Thank God, they have not called it seasonal”. “It is structural and the government has no solutions or reforms that would address the structural problems,” he said, adding that he wasn’t sure if the government understands “the difference between cyclical and structural”.

“Rural consumption is down, according to NSSO. Rural wages are down. Producer prices are down, especially for farmers. Daily wage earners get work for no more than 15 days a month. Demand for MGNREGA is up. FMCG, both durable and non-durable, are selling less. Wholesale prices are up. CPI is going up. Onions sell at Rs 100 a kg,” he said.

Earlier in the day, Chidambaram joined the Opposition protest outside Parliament against the rising onion prices. Asked to comment on Finance Minister Nirmala Sitharaman’s comment that her family doesn’t eat onions, he quipped, “does she eat avocado?”

At the press conference, Chidambaram said: “I was not sarcastic, I was quoting her. They should have planned in advance, what is the point of importing (onions) now? When will they arrive? But if the Finance Minister says I don’t eat onions, that shows the mindset of this government.”

“There is less demand among the people because they have less money and less appetite to consume due to uncertainty and fear,” said Chidambaram. “People don’t want to buy because they have less money and they have less confidence about the future,” he said.

He also pointed out that the RBI had “reduced its (GDP growth) forecast from 7.4 per cent in February 2019, to 7.2 per cent in April 2019, to 6.1 per cent a month ago, and 5 per cent today”. Saying this was “unprecedented”, he said the RBI was either “completely incompetent in making its first assessment in February 2019 or the government has been extremely incompetent in managing the economy in the last eight months”.

He said the BJP government’s idea of reforms was that “GDP is irrelevant, protection is good, personal Income Tax must be cut, Customs duty must be increased, and this is the way to make India strong”. The economy can be brought out of the slowdown, he said, “but this government is incapable of doing that”.

Responding to a question, he said: “Global slowdown is responsible to the extent that it affects our exports, but exports are only one of the four drivers of the economy… the other three are entirely the responsibility of the Indian government”.

In his opening remarks, Chidambaram said that as he “breathed the air of freedom” after being released, his “first thought and prayers were for the 75 lakh people of the Kashmir Valley who have been denied their basic freedoms since August 4”. Saying that he was “particularly concerned about the political leaders who have been detained without charges,” he said, “freedom is indivisible: if we must preserve our freedom, we must fight for their freedom”.

He said he intended to visit J&K, if the government allowed him to do so.

“As far as Kashmir is concerned, the reason is arrogance”, he said, calling the Centre’s decision “ill-thought out, ill-founded, ill-intention design and policy to suppress the basic freedoms of the people”. In the case of the economy, he said, “it is simply ignorance and incompetence”.

Regarding industrialist Rahul Bajaj’s comment at an event last week, Chidambaram said “there is complete fear everywhere…Every institution is gripped by fear and the media is no exception”. With Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, and Railways and Commerce Minister Piyush Goyal listening, Bajaj had expressed concern over the lack of confidence among corporates to criticise the central government.

Chidambaram also supported the protest against a fee hike in Jawaharlal Nehru University (JNU) and the Indian Institute of Mass Communication. In a welfare state, he said, “higher education should be totally free”, and if that is not possible, “we must only charge reasonable fees”.

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