The government on Wednesday came under heavy criticism from the Opposition in Rajya Sabha over its management of economy, with parties accusing it of living in a state of denial about the “deepening” crisis and claiming that there is an atmosphere of “uncertainty” and people and businesses are losing trust in Indian economy.
The Opposition said the government is making policies for just 10 per cent of the population and the rest are being ignored.
The BJP hit back and argued that the current slowdown is cyclical. “Yes, it is a slowdown but it is a cyclical slowdown; it is not structural. It is likely to bottom out by March and it would be followed by a solid growth,” BJP’s Ashwini Vaishnaw said.
He said the seeds of the slowdown were sown during the Congress-led UPA-2, as the 2G spectrum and coal scams, as well as cancellation of allocation of natural resources by Supreme Court, “brought in a huge economic shock”.
The Congress said the government’s attempt to shore up revenue by “selling profit-making” PSUs will not help and argued the country is staring at an “alarming fiscal deficit.” The party called strategic disinvestment as “panic privatisation” and a “grand clearance sale”.
“We are staring at a deepening economic crisis which is India-specific. The four engines of the economy —- investments, factory output, credit off-take to industry, and exports —- are shutting down, and that is a concern,” Congress’s Anand Sharma said during a short-duration discussion.
Sharma said: “In the last five years, the share of 1 per cent of the rich in national wealth has gone up from 40 per cent to 60 per cent. Ten per cent of the rich have four times the share of wealth than the rest 90 per cent of the population of India…. The situation (today) cannot be called a slowdown or merely a recession. It can no more be explained away as cyclical, structural or linked to the global developments.”
BJP’s Vaishnaw said while the UPA’s “populist schemes” such as MGNREGA and loan waiver weakened the economic structure, “reckless capital goods import policy” weakened the capital goods industry and the industrial base.
Several opposition members argued that people’s trust in the government and its policies is eroding fast.
“The basic issue today…Why is industry so unsure? Why are people unsure? My hypothesis today is based on a five-lettered word: trust,” TMC member Derek O’Brien said.
T K S Elangovan of DMK accused the government for the present state of the economy and said it is selling profit-making PSUs. He also quoted NITI Aayog’s forecast that economic growth will slow down further in the second quarter of this fiscal.
Elamram Kareem of CPI(M) suggested that a large dose of public investment is required for boosting economic growth.
Arguing that the “sentiment is down,” Congress’s Jairam Ramesh said the Government should acknowledge the reality that GDP growth has declined in the last eight quarters.