Prime Minister Narendra Modi and Finance Minister Arun Jaitley must bear responsibility for slowdown in the economy, said Chidambaram
NEW DELHI (IANS) — Former Finance Minister P. Chidambaram on Wednesday said that owing to “an atmosphere of fear”, Indian industry is not complaining about the policy paralysis of the Narendra Modi government and urged them to speak up.
He also said Prime Minister Narendra Modi and Finance Minister Arun Jaitley must bear responsibility for slowdown in the economy.
On being told that India Inc complained of policy paralysis during the UPA II, but are not doing so now, Chidambaram said: “I just want to make a correction. You said Indian industry doesn’t complain of policy paralysis. The correction is the Indian industry doesn’t complain (publicly).
“They complain to us privately. Indian industry must speak up.”
The Congress leader also cited the happening in the US last month when “business persons and heads of several companies quit US President’s (Donald Trump) several committees and councils in protest against what he was saying and doing”.
However, stressing that he was “not asking Indian industry to do that”, he said: “Industry must at least have the courage to speak up in matters relating to the economy.”
Chidambaram also recalled how active business chambers CII, Assocham and Ficci were during the UPA’s rule.
“They criticised us in several meetings.
“But, now there is an atmosphere of fear. I am appealing to Indian industry, doyens of Indian industry to speak up. Say what’s happening. We just saw major companies shedding jobs. Companies like cognizant, Infosys shed jobs, Yes Bank is shedding 2,500 jobs.
There is an atmosphere of fear. I am appealing to Indian industry, doyens of Indian industry to speak up. Say what’s happening. We just saw major companies shedding jobs. Companies like cognizant, Infosys shed jobs, Yes Bank is shedding 2,500 jobs.
“But, they (the government) are sort of papering it over by saying this is normal attrition. This is not normal attrition,” he said.
Asked how he sees the economy by the end of this financial year, Chidambaram said: “I think all the indicators show that second quarter of this year will be below 6 per cent or there could be the same 5.7 per cent or a shade more or a shade less. But that is bad news.”
On the the difficulties after the implementation of GST, Chidambaram said the design was flawed and the implementation was terrible.
“We pointed out the design flaws, they (the government) refused to correct it. We cautioned them on the hasty implementation and asked them to defer it by a few months, they refused that. When implementation started, we said that it will impose a huge cost on small and medium businesses, that has proved true.
“Now even big businesses are complaining that the entire manner in which GST is being implemented has created enormous difficulties for them,” he added.
About the fiscal deficit target, Chidambaram said: “I know that there are some people who recommend that fiscal deficit target should be relaxed, I am opposed to that. I think it is a terrible idea. They should have reached 3 per cent in 2016-17 or at least in 2017-18.
“They have set for themselves a target of 3.2 per cent which itself is a relaxation. If they relax a fiscal deficit target further, it means that revenues are under pressure, the expenditure is out of control, they are not worried about inflation and they are not worried about interest rates going up. All this will only add to the distress in the economy,” he added.
