Criticising the Central government on the state of the economy, former Finance Minister P Chidambaram Monday said that tyres of three of four wheels on which the economy rides are punctured, and said that bringing petroleum products under GST will lead to an immediate price decline.
Stating that there is widespread anger about “artificially fixed prices of petrol, diesel and LPG”, the senior Congress leader said there is “absolutely no reason why prices (of petroleum products) should be higher than what they were in May-June 2014.”
Calling the charges “baseless and irresponsible”, Union minister Prakash Javadekar said Chidambaram is criticising the country’s development at a time when it is the fastest growing economy in the world.
Addressing the media, chidambaram said, “If you bring petroleum products under GST, the prices will decline immediately. I am not saying cut it by Rs 25 — all I am saying is that between May 2014 and now, you have created a head roof of Rs 25 per litre. Cut it by Rs 5, Rs 6, or Rs 7. Why you are cutting it by one paisa?” He claimed that the government’s policy blunders and reckless decisions are affecting the economy.
He said, the RBI’s Consumer Confidence Survey shows 48 per cent of those surveyed are of the view that economic conditions worsened over the last 12 months. farmers’ despondency has turned into anger, resulting in protests.
He said, “Tyres on three of the four wheels on which the economy rides are punctured. While export growth rate in the last four years has been negative, private investment is in the doldrums, if not dead. Gross fixed capital formation is stuck at 28.5 per cent for three years. Although there is a mild uptick, private consumption was limping until a few months ago.”
He said, “The only tyre that seems to be inflated is government expenditure. But here, too, the government’s options are getting limited because pressure on current account deficit and fiscal deficit.” Chidambaram said flawed implementation of GST continues to haunt trade and business, and adverse effect of demonetisation have been established “beyond doubt”.
He said gross NPAs have risen in the last four years from Rs 2.63 lakh crore to Rs 10.3 lakh crore and will rise more.
Javadekar questioned the Congress party’s “reasoning” in attacking the Modi government over inflation. “It had been less growth and more inflation during the UPA regime,” he said.
He blamed the UPA government for accumulated NPA, calling it “their sin”. countering Chidambaram’s attack on the farmers’ issue, Javadekar said the UPA kept rejecting the Ranganathan Committee recommendation on providing minimum support price for farm produces. “the Modi government has said that it is committed to it. We are trying to implement it, but the Congress is calling it a jumla,” he said.