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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)

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Big reforms Led to India becoming the fastest growing major Economy globally: Garg

It also has enormous implications for emerging markets and developing countries

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The RBI building in Mumbai.
The RBI building in Mumbai. Photo credit: AFP/Sajjad Hussain

The major reforms undertaken by the Indian government for raising economic growth and maintaining macroeconomic stability have made the country one of the fastest growing major economies in the world, said Subhash Chandra Garg, Secretary, Department of Economic Affairs (DEA).

Garg was addressing the Special Event hosted by US-India Strategic Partnership Forum on ‘Indian Economy: Prospect and Challenges’ in Washington D.C on Friday.

Indian economy needs more reforms.
Indian economy needs more reforms.

He said the launch of the Goods and Services Tax (GST) represented an “historic economic and political achievement, unprecedented in Indian tax and economic reforms, which has rekindled optimism on structural reforms.” He further emphasized that India carried-out such major reforms when the global economy was slow.

“With the cyclical recovery in global growth amid supportive monetary conditions and the transient impact of the major structural reforms over, India will continue to perform robustly,” Garg said.

During his meetings, Garg highlighted that the digital age technologies have profound implications for policies concerning every aspects of the economy. It also has enormous implications for emerging markets and developing countries.

Also Read: Biggest Bank Frauds Which Shook The Indian Economy

He expressed that the response to such a transformation will have to shift from ‘catch up’ growth to adoption/adaption of digital technologies for development and growth.

Garg also informed that India has started adopting policies and programmes for transforming systems of delivery of services using digital technologies and connecting every Indian with digital technologies and access through Aadhaar and other such means.

Indian economy should be on rise.
Indian economy should be on rise. Image: Mapsofindia

While citing the example of expanding mobile data access, he mentioned that India is now the largest consumer of mobile data in the world with 11 gigabytes mobile data consumption per month. He informed that India is investing in digital technologies, encouraging private sector to adapt these technologies and also addressing the taxation related issues by introducing equalisation levy.

Garg is currently on an official tour to Washington D.C. to attend the Spring Meetings of the International Monetary Fund and the World Bank and other associated meetings. He is accompanied by Urjit Patel, Governor, Reserve Bank of India and other senior officials. IANS