Senior BJP leader and former Union Finance Minister Yashwant Sinha has blamed the consumer-centric strategies adopted by the UPA government during the economic downturn of 2008–09 for the continued low growth rate and high inflation levels.
He was speaking at an interactive programme here on Wednesday organised by the Federation of Karnataka Chambers of Commerce and Industry (KFCCI). The UPA government had responded to the crisis with “unrestricted and unrestrained” fiscal expansion, he said.
The economy that had been growing at 8 per cent or more started to see a sharp fall in its growth because of the lack of investment in economy.
“Today, we are happy with a growth of just 4.5 per cent,” he said. Even this growth rate, he added, was on account of good monsoon and not on account of a sound economic policy.
The flawed policies resulted in the burden falling on the Reserve Bank of India (RBI) which had raised interest rates several times, Mr. Sinha said.
This had set off a “vicious cycle” of high inflation, high interest rates, low investment and low growth, creating a “sentiment of depression” in the economy. Projects across sectors had stagnated, he said.
Undoing this would require changing the macro-economic parameters and sector-specific policies, keeping inflation rates at a modest level and cutting down on interest rates.
Mr. Sinha said the foreign policy too was flawed and India had “allowed relations with the U.S. to deteriorate”, which was not just on the diplomatic side. Ties with China too deserve better, he added.
GST regimeMr. Sinha, who heads the Parliamentary Standing Committee on Finance, said his party was committed to passing the Goods and Services Tax (GST) Bill if voted to power.
The GST regime would be handled in a manner that addresses the concerns of the State governments which were apprehensive about the legislation robbing them off their taxation rights, he said.
