Economic slowdown structural; Centre has no solution: Chidambaram
New Delhi: A day after the Supreme Court granted bail to former Finance Minister P. Chidambaram, the Congress leader attacked the Central government for the economic slowdown in the country saying they are unable to diagnose the issue and the government has no solutions that would address the structural problems.
“The (central) government is calling the present slowdown ‘cyclical’. Thank god they have not called it ‘seasonal’. It is ‘structural’ and the government has no solutions or reforms that would address the structural problems,” Chidambaram told the media.
He said while the Congress-led United Progressive Alliance (UPA) lifted 140 million people out of poverty between 2004 and 2014, the BJP-led National Democratic Alliance (NDA) has, since 2016, “pushed millions of people below the poverty line”.
As he addressed the media after spending 106 days in jail, he said the most pressing and explosive issue of the day is the state of the economy.
“The place to start is the diagnosis. If the diagnosis is wrong, the prescription will be useless, maybe even fatal. Even after seven months into the fiscal year, the BJP government believes that the problems faced by the economy are cyclical,” he said.
He added that the government is “wrong and clueless and is unable to look for the obvious clues because it is stubborn and mulish in defending its catastrophic mistakes like demonetisation, flawed GST, tax terrorism, regulatory overkill, protectionism, and centralized control of decision-making in the PMO.”
He said nothing sums up the state of the economy better than the following series of numbers: “8, 7, 6.6, 5.8, 5 and 4.5. Those are the quarterly growth rates of GDP in the last six quarters. The third and fourth quarters of 2019-20 are not likely to be any better. We will be lucky to end the year if growth touches five per cent.”
The former Finance Minister added the Prime Minister has been unusually silent on the economy and has left it to his ministers to indulge in bluff and bluster.
Speaking on the rural consumption, he said it is down according to NSSO.
“Rural wages are down. Producer prices are down, especially for farmers. Daily wage earners get work for no more than 15 days a month. Demand for MGNREGA is up. FMCG — both durable and non-durable — are selling less. Wholesale prices are up. CPI is going up. Onions sell at Rs 100 a kg. What do these point to? There is less demand among people because they have less money and less appetite to consume due to uncertainty and fear.”
He explained unless the demand increases, there will not be increased production or output or increased investment.
“The economy can be brought out of the slowdown, but this government is incapable of doing that. I believe that Congress and some other parties are better equipped to pull the economy out of the slowdown and push economic growth, but we have to wait for better times.”
The Congress leader said as he stepped out of the jail, his first thought was for the “75 lakh people of Kashmir, who have been denied their basic freedoms since August 4”, adding “we must fight for their freedom”.
“I am glad to speak to you exactly 106 days after I last spoke to you. As I stepped out and breathed the air of freedom at 8 p.m. last night, my first thought and prayers were for the 75 lakh people of the Kashmir Valley who have been denied their basic freedoms since August 4. I am particularly concerned about the political leaders who have been detained without charges. Freedom is indivisible: if we must preserve our freedom, we must fight for their freedom,” he said while speaking to the media.
He also said he is grateful for the Supreme Court order.
“The order will clear the many layers of dust that have unfortunately settled on our understanding of criminal law and the manner in which criminal law has been administered by our Courts.”
He also said he never commented on cases that are sub-judice and will continue to adhere to that principle.
“To many of your possible questions on the case, the answers can be found in the lucid order of the Supreme Court pronounced yesterday. In the last 106 days, I was strong in spirit and I have become stronger,” he added.
After spending 106 days in Tihar jail, Chidambaram walked out on Wednesday evening.
Chidambaram was arrested on August 21 by the Central Bureau of Investigation (CBI) in connection with a probe into granting of Foreign Investment Promotion Board (FIPB) approval to the INX Media, now known as 9X News, when he was the Finance Minister.
He was sent to judicial custody on September 5. On October 16, while in judicial custody at Tihar Jail, he was arrested under sections of the Prevention of Money Laundering Act (PMLA) by the Enforcement Directorate (ED).
Since October 17, Chidambaram was remanded to the ED custody till October 30.