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Chidambaram criticizes government, claims economy stuck in groove

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New Delhi: The Indian economy is stuck in a groove and the growth of the Gross Domestic Product in 2015-16 is not likely to be higher than 7.3 percent, former finance minister P. Chidambaram said on Friday.

There was acute distress in rural India since promised jobs were not created and people were not impressed by Modi’s numerous visits to foreign countries, he said at a press conference here.

The Congress leader said the BJP-led government had confidently predicted the growth of Indian economy at 8.1 to 8.5 per cent in 2015-16 at the beginning of 2015 and that many of its promises, including on more jobs, were premised on a high growth of GDP.

“I am afraid none of the promises has materialized. For the whole of 2015-16, GDP growth is not likely to be higher than 7 to 7.3 percent, which means it will be the same as – or lower than – in 2014-15. The economy is stuck in a groove,” Chidambaram said.

He said the mid-year economic analysis has pointed out that private investment and exports – two of the four drivers of demand – were languishing.

“The Indian economy is like a car running on two wheels. Corporate balance sheets are stressed, net sales have fallen by 5.3 percent, and profit after tax is flat. Non-food credit growth at 8.3 percent is the slowest in 20 years. The growth of credit to industry is 4.6 percent while credit to medium enterprises has actually shrunk by 9.1 percent,” the Congress leader said.

The former minister said exports have recorded decline for 12 successive months compared with the previous year. “This is unprecedented,” he said.

He said the government did not seem confident of meeting the fiscal deficit target of 3.9 per cent and cautioned it against deviating from the path of fiscal consolidation in 2016-17.

“Crop insurance is unavailable to most farmers. Banks are reluctant to give loans against jewelry. Education loans have practically stopped,” he said.

The Congress leader accused the government of failing to check price rise and alleged growing intolerance, saying these had led to “much grief and fear among the people”.

The former minister said the 26th quarterly employment survey showed that job creation in manufacturing and export-oriented sectors fell by 43,000 whereas these sectors added 182,000 jobs in the same period in 2014.

“There is no evidence that the promised jobs are being created,” the former finance minister said.

Chidambaram referred to the low prices of international crude oil and said there was no international pressure on the government.

“I am not yet prepared to say that there has been fiscal mismanagement, but there are pointers to serious mistakes in fiscal management.”

Chidambaram accused the Narandra Modi government of not engaging the opposition on any important issue and said people were wondering if the central government had a clear and consistent policy on Pakistan.

He also rejected the charge of “obstructionism” made against the Congress by Prime Minister Narendra Modi on Thursday.

Chidambaram said the Congress opposition to the government’s alleged wrong policies or poorly-drafted laws or acts of misconduct or misuse of government agencies cannot be termed as obstructionism.

The Congress leader said that the overbearing attitude of the government was mainly responsible for the frequent disruptions in parliament and the absence of cooperation outside parliament.

He said the Congress had cooperated with the government in passing 67 and 45 bills in the Lok Sabha and the Rajya Sabha respectively during the last 19 months.

Referring to Nepal, he said India seemed to have lost the goodwill of the people as well as the government of Nepal as also Madhesi parties.

“Rhetoric, U-turns, and impulsive steps do not make for a coherent foreign policy,” he remarked.

Referring to Modi’s visits abroad, the Congress leader said: “When anything is overdone, there are not only diminishing returns, but it also invites ridicule, as you will find from a cursory survey of the social media.” (IANS)

(Photo: www.sify.com)

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Sri Lanka’s Prime Minister Gets Reinstated

A spokesman for Wickremesinghe said he was expected to form a Cabinet in the coming days, with priority given to the 2019 budget

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Sri Lanka, prime minister
Sri Lanka's ousted Prime Minister Ranil Wickremesinghe looks on during a parliament session in Colombo, Dec. 12, 2018. On Sunday he was reinstated as prime minister, ending a political crisis.

Sri Lanka’s sacked Prime Minister Ranil Wickremesinghe was reinstated Sunday, his party said, ending a 51-day crisis that had paralyzed the island nation and pushed it toward debt default.

The 69-year-old leader was sworn in by President Maithripala Sirisena, who sacked him Oct. 26 and triggered a power struggle that brought the country’s government to a standstill.

Wickremesinghe had refused to step aside since being sacked and replaced by former leader Mahinda Rajapaksa.

Power struggle won

Sri Lanka had drifted without a functioning government for nearly two months as the rival factions jostled for power in parliament and the courts.

Sri Lanka, Parliament, Prime minister
Supporters of ousted Sri Lankan Prime Minister Ranil Wickremesinghe celebrate outside the supreme court complex in Colombo. VOA

Sirisena had vowed to never reappoint Wickremesinghe, who he publicly castigated in speeches in recent weeks, as prime minister under his watch.

The acrimony between the two was underscored Sunday when Sirisena barred journalists from attending the swearing-in ceremony, leaving it to Wickremesinghe’s legislators to announce the appointment.

“We thank the citizens of the country who fought the illegal seizure of power and ensured that democracy was restored,” his United National Party of Sri Lanka posted on Twitter

President’s appointee failed

Rajapaksa, Sirisena’s appointee, was unable to govern, failing many times to muster a majority in parliament.

Sri Lanka, prime minister
Sri Lanka’s disputed Prime Minister Mahinda Rajapaksa gestures as he arrives for a meeting with his supporting lawmakers at the parliamentary complex in Colombo, Sri Lanka, Nov. 29, 2018. VOA

He was defeated six times on the floor of the legislature before being forced to step down Saturday.

Sirisena suffered a huge setback when the highest court in the country ruled last week that he acted outside the constitution when he sacked parliament in early November.

The court also confirmed Friday that Rajapaksa and his purported Cabinet could not exercise the powers of the office they held.

Also Read: President’s Dissolution of Parliament Unconstitutional: Sri Lanka’s Court

A spokesman for Wickremesinghe said he was expected to form a Cabinet in the coming days, with priority given to the 2019 budget, without which foreign debt servicing may not be possible.

Sri Lanka had been braced for a government shutdown as parliament failed to approve spending for 2019, and ratings agencies downgraded the country’s credit rating amid fears of a sovereign debt default. (VOA)