Former Finance Minister Yashwant Sinha Sunday raised concerns about the “very deep crisis” the Indian economy is in, accusing the government of “fooling people” by saying the situation would improve in the next quarter or the one after that.
Renewing his attack on the BJP government, Sinha said, “No matter what the powers that be say, the fact is that we are in a very deep crisis. All this brave talk that the next quarter will be better or the quarter after that will be better is not going to happen. They (the government) are trying to fool the people by saying the next quarter will be better.”
Sinha, who had handled the finance portfolio in the NDA government under Atal Bihari Vajpayee, said such a crisis cannot be resolved in a short span of time. “This type of crisis takes a long time, like three to four or even five years (to subside). It cannot be resolved at the drop of a hat or by wielding a magic stick,” news agency PTI quoted Sinha as saying.
Speaking on the last day of Times LitFest, Sinha observed that India’s economy right now was witnessing “death of demand” and that the “starting point of it” was the rural and agricultural sector. “There is no demand in the economy and that is the starting point of the crisis. They (government of the day) are least bothered about what is happening to our farmers, people living in rural areas, now that is where the death of demand started from,” he said.
According to him, the demand first dried up in the rural and agricultural sectors, then in the informal sector before finally travelling to the corporate sector.
Sinha said he had warned the government of this “downward spiral” in 2017, but to no avail. “Twenty-five months ago I wrote a piece in a leading newspaper and warned the government of the down-slide that I could see coming in the economy. My purpose was to tell those who were managing the economy then that the time to take corrective steps is now. But that did not happen.”
Sinha claimed he warned the “people in the government personally through letters and meetings” before speaking publicly about the crisis. “This was something I had done after already warning them (people in the government) personally through letters, personal meetings… it is only when the party’s doors were closed on me that I had to start speaking publicly,” he said.
Once a BJP leader, Sinha held the post of finance minister during Vajpayee’s rule from 1998 till July 2002, before being made the foreign minister. He had quit the party in 2018, alleging threat to democracy in India under Prime Minister Narendra Modi.
Owing to a deceleration in manufacturing output and subdued farm sector activity, India’s GDP growth slipped to a 26-quarter low of 4.5 per cent in the second quarter (July-September) of the current fiscal, data released by National Statistical Office (NSO) on Friday showed. The GDP growth rate has now slowed for the sixth consecutive quarter, with the previous low recorded at 4.3 per cent in March 2013.
Earlier, former prime minister Manmohan Singh too termed the 4.5 per cent growth for the second quarter a “shock decline”, saying many industrialists had told him they lived in fear of harassment by government authorities.
(With inputs from PTI)