Former finance minister P. Chidambaram on Friday said that India’s economy is stuck in a groove.
Former finance minister P. Chidambaram on Friday said that India’s economy is stuck in a groove. It is like a car running on two wheels and blamed the Modi government’s “stubborn and unbending” attitude for the GST logjam.
Addressing a press conference at the AICC headquarters here, he said: “Corporate balance-sheets are stressed, net sales have fallen by 5.3 per cent and profit after tax is flat. Non-food credit growth at 8.3 per cent is the slowest in 20 years. Growth of credit to industry is 4.6 per cent while credit to medium enterprises has actually shrunk by 9.1 per cent.”
The former Union minister said 2015 has ended on a “sombre and subdued note” and many promises of the government — more jobs, greater investment and quicker infrastructure development — have not materialised.
On the GST logjam, he said the government has only itself to blame and its stubborn and unbending attitude. After the Bihar elections, there were initial signs that the government would reach out to the Opposition and adopt a “consensual” approach but that hope was short-lived.
The Congress and some other parties had objected to some provisions of the GST legislation on “weighty and well-reasoned” grounds. The government was outright dismissive until the chief economic advisor virtually endorsed two of the three principle objections and made no recommendation on the third. “Yet, the government has not been able to find a way to accommodate the views of the Opposition and pass the GST Bill,” he said.
Prime Minister Narendra Modi had invited Congress president Sonia Gandhi and former Prime Minister Manmohan Singh to a meeting, where they gave their three precise objections on the GST bill.
“What did the Prime Minister say... We will come back to you after reflecting within the government. That’s almost a month now. We have not received the written response of the government or the revised formulation of the government on the three principal objections,” Mr Chidambaram said.
He said the ball is entirely in the government’s court and it is for them to come back and “tell us whether they accepting our objection (on GST bill), whether they are revising formulation, whether they are amending sections”.
The Congress wants a constitutional cap on GST rate, withdrawal of one per cent tax on inter-state movement of goods and a Supreme Court judge-headed dispute resolution panel.
