P Chidambaram: Pluck up courage for reforms

Attacking the Centre over its handling of the economy, the Congress on Saturday asked it to pluck up courage to go for bold reforms, saying the party will engage with the government if it means business.

“Once the economy stabilised as I believe it had by June 2014, the government should have then given the economy a big push by going for bold structural reforms, taken the difficult decisions which were pending because UPA did not have absolute majority in the Lok Sabha,” former finance minister P. Chidambaram told reporters.

“Now that this government has 282 or maybe 283 (seats) in the Lok Sabha, it should pick up the courage and take up bold structural reforms and in doing so, it must engage the Opposition. The Congress is willing to engage if the government means business,” Mr Chidambaram, who has been nominated from Maharashtra by the party for the Rajya Sabha polls, said.

On the GST, he said the government has failed to engage the Congress over the three principal objections raised by it. “Either the government should convince us that our objections are unfounded or government must accept our objections if they are well-founded and bring about amendments. Such an engagement, such a dialogue, to the best of my knowledge, has not taken place across the table,” he said.

Mr Chidambaram also wondered whether the Modi government “deserves” Dr Raghuram Rajan, describing him as “one of the most outstanding economists in the world”, amid an unrelenting attack by BJP MP Subramanian Swamy against the RBI governor. He said: “The UPA government... placed full confidence in him at that time and we continue to place full confidence in him today.”

Advising the government to reach out to the Opposition, he said: “Work with Opposition, engage the Opposition. There is talent and sound advice outside the government. Call them, talk to them. That’s the advice I will give any government, including my own government.”

On two years of the NDA, he said: “If agriculture and industry are in distress, what is there to celebrate ”

The government’s record in agriculture is dismal, he said, adding growth was negative at -0.2 per cent in 2014-15 and a meagre 1.1 per cent in 2015-16 and the government failed to anticipate and tackle the acute distress in rural India.

“The Supreme Court has chastised the government in the strongest terms for negligence in managing the consequences of two years of drought and passing the buck in providing drought relief,” he said.

With regard to industry, Mr Chidambaram said, annual sales growth of all firms in 2015-16 was negative at -5.7 per cent and annual sales growth of manufacturing firms was negative at -11.2 per cent.

“These are reflected in credit growth which is at a 20-year low of 9.9 per cent (average for the months of 2015-16). They are also reflected in the slump in merchandise exports which was -15.5 per cent in 2015-16. Another indicator is the Index of Industrial Production which stood at a meagre 2.4 per cent in 2015-16,” he said.

“All I can point out is there are no jobs, there are no industries, industries are in slump, exports are down for 17th successive month and nobody seems to care. If exports are down, thousands of jobs must have been lost and that’s the logical inference. The citizens of this country will drop their own score cards,” he added.

“The average citizens need jobs and incomes. They do not consume GDP numbers,” he viewed and said the most notable failure of the NDA government has beenin job creation, Chidambaram claimed.

Expressing concern over rising retail inflation, he said, “it is not clear whether the government and the RBI are agreed on the strategy for inflation management. In absence of an agreed strategy, inflation is bound to increase.”

CPI inflation has risen from 3.7 per cent in July 2015 to 5.4 per cent in April 2016.

He also pointed out that it’s only the BJP and not its allies which are celebrating two years of the government and NDA constituents like Shiv Sena have been “extremely critical” of the ruling party.

Taking a dig at ‘Make in India’ campaign, he said it is a non-starter at the moment.

There is a study which shows that the bulk of the FDI inflows have come into the services sector and not into manufacturing, he said.

“893 projects were classified as stalled projects in March 2016. According to CMIE, 1,137 projects slipped into the categories of stalled/shelved/abandoned in the last two years. There is no evidence of private investment in Greenfield manufacturing industries,” he added.

Questioning the authenticity of growth numbers, the former Union minister said

there is little to cheer. “There is a growing dichotomy between the GDP numbers and the other economic indicators. If calculated under the methodology of the old series, the estimate for 2015-16 would be about 5 per cent and not 7.6 per cent,” he said.

On the bad loans woes, Chidambaram said the government has handled it with a heavy hand.