Comparing India’s economy to a vehicle whose three tyres have been punctured, former Finance Minister P. Chidambaram on Monday said a recent survey showed “worsening economic conditions in the past 12 months, farmers’ despondency had turned into anger, widespread resentment over high fuel prices and rampant joblessness.”
Addressing a press conference at the Congress headquarters, he said a flawed GST affected trade and business, and demonetisation “devastated the economy beyond doubt”.
“The tyres of three of the four wheels on which the economy rides are punctured. Firstly exports: the growth rate in the last four years has been negative. Secondly, private investment: it is in the doldrums, if not dead. Gross fixed capital formation is stuck at 28.5% for three years. Thirdly, private consumption: it was limping until a few months ago, there is a mild up-pick, and we keep our fingers crossed,” Mr. Chidambaram said. “The only tyre that seems to be inflated is government expenditure, but here too the government's options are getting limited because of the pressure on the current account deficit and the fiscal deficit,” the former Minister said.
Demonetisation
“The adverse effects of demonetisation have been established beyond doubt. The growth rate has declined from 8.2% in 2015-16 to 6.7% in 2017-18 — exactly 1.5% as I had predicted and endorsed by Dr. Manmohan Singh,” he said.
Talking about the fallout of the note ban on jobs, the former Finance Minister pointed to the situation in Tamil Nadu and across the country.
“The Tamil Nadu government has officially acknowledged that 50,000 SME units were shut down in the State in 2017-18,” he said.
Asked to comment on the government’s latest move to allow lateral entry of professionals and if it would alter policy making, he said, “There are serious misgivings about their advertisement that has appeared but there are a number of questions that deserve to be asked and we will in the next couple of days ask those questions.”
