The BJP government led by Prime Minister Narendra Modi said India will be a $5 trillion dollar economy by 2024. However, the recently presented Union Budget and the gap in expenditure versus spending suggest that the claims and actions don’t converge, says former Union finance minister of India.
Syed Khaled Shahbaaz | Caravan Daily
HYDERABAD — The idea of India becoming a $5trillion dollar economy by 2024 is far-fetched, former Union finance minister P. Chidambaram has said.
Presenting a perspective on the ‘State of Indian Economy’, at Muffakham Jah College of Engineering and Technology in Hyderabad on Saturday — a week after finance minister Nirmala Sitharaman presented the Union Budget– the 74 year politician said the new budget shattered all hopes of development and would halt progress. He also termed it the “most anti-poor budget in the history of India”.
According to Chidambaram, who had functioned for long as finance Minister in the Congress-led government, “the decline in India’s GDP for six successive quarters (under the Modi rule) is unprecedented. This has never ever happened in the history of India.”
It was the Modi government’s blunders that crippled the economy, he said, blaming demonetization as the “biggest blunder”, followed by “tax terrorism” in the name of “flawed” GST (Goods and Services Tax). The former minister pointed out that even the expenditure from the government’s welfare schemes including for those linked to women, children, nutrition, employment, skill development etc did not meet the expectations.
The government, he said, failed in utilizing the budget funds in the past, and now it was making tall claims – a time when it did not have such money to spend. “The decline in government spending has affected not only the general public, but also the financially vulnerable and economically backward sections of the country,” he said, adding, “Performance of almost every sector showed the economy is suffering.”
Chidambaram said the automobile, manufacturing and industrial sectors which, like many others, were now performing at subnormal capacity due to the government anti-progress decisions. “The automobile industry alone has suffered with over 2 lakh jobs lost and 296 workshops closed. Many automobile companies that worked for 7 days a week are now clocked down to operating for only 4 days a week,” a clear indicator of a thaw in performance of the national economy.
Even agriculture, which was one of the most vibrant sectors in India, now has as low as a 2 per cent growth rate, he said.
The results, as Chidambaram note, have spiraled out in the form of job cuts, and reduced consumption of goods and services by customers, thereby creating demand constraints and eventually starving the country of investments.
Terming the Micro Small and Medium Enterprises (MSMEs) as the employment engine of the nation responsible for providing nearly 93 per cent of the jobs in India, he said MSMEs had also taken a beating, which was a deplorable indicator of the slowdown under the present government.
Questioning the claims of finance minister Nirmala Sitharaman while presenting statistical data, Chidambaram questioned, “If all is well, why is the government not able to collect tax as it has claimed earlier? The corporate tax collection, personal tax collections and different taxes were all under-collected, he said.
“The government’s new slogan Sabka Saath, Sabka Vikaas, Sabka Vishwas has failed at implementation level, with the youth going jobless, more than 40 per cent students undernourished, and countless many not having even access to food due to high prices. This is the most anti-poor government in the history of India.”
Government schemes such as the mid-day meal, which started in Tamil Nadu, and was later scaled up at the national level, has failed to live up to the expectations. Out of the Rs11,000 crore sanctioned, only Rs 9,900 crore was spent. Similarly, the Ayushman Bharat programme, which was PM Modi’s favourite scheme, has been recording a 50 per cent spend out of the allocated Rs 3,300crore against the allocated budget of Rs6,500 crore. Chidambaram said that, with these as indicators, it was hard to gauge India’s progress.
Chairman of the Islamic Development Bank (India chapter) Zafar Javeed delivered the welcome address at the event while senior Congress leader and MP, Uttam Kumar Reddy, also spoke.
Syed Khaled Shahbaaz is a Gold Medalist in Mass Communication and Journalism from Osmania University based in Hyderabad.