A united Opposition on Tuesday took on the government over the slowdown in the economy, blaming its “reckless policies” for the present state of affairs.

Fearing a repeat of the 1991 economic crisis, when India had to mortgage gold, the Opposition said depreciation of rupee, slowdown in growth and rising prices were signs of a looming crisis.

During a discussion under Rule 193 on the economic situation in the country, former Finance Minister Yashwant Sinha went to the extent of saying that the government had lost control over the economy. Alleging that the government was intentionally “playing with the economy” for the past five years, he said the result was that the whole nation was suffering.

“We have never seen such a corrupt and incompetent government. We do not want this government anymore,” he said.

On volatility in the currency, Mr. Sinha said the government had failed to control it. “Market is disturbed and whatever is happening is not good for the country.”

Reaction of CPI

Initiating the debate, CPI leader Gurudas Dasgupta said, “the country was facing a massive disaster and economic tsunami because of reckless policies of the government.” He said the government should take responsibility for the state of “despondency, fear and uncertainty.”

“A non-performing government has generated a dangerous crisis which is almost an economic disaster, thanks to their incapacity and inability,” he said. Suggesting that the government was looking at the U.S. to help address the economic problems here, the CPI leader said, “Crisis is within India, not in America. Government has to evolve a policy to face the challenge...it has failed.” Mr. Dasgupta said the government had “failed to stem the financial rot” and was taking the country to a “crisis situation” witnessed in 1991. He said the situation was “distressing, alarming and chaotic.”

Referring to the Food Security Bill passed by the House on Monday, he said, “This bill itself indirectly makes the government admit that those hungry people who cannot buy food have to be provided with food at subsidised rates.”

He said while industrial production index growth rate had fallen from 1.1 per cent in 2012-13 to minus 2.2 per cent in June this year, the rate of growth of manufacturing sector declined from 2.6 per cent in May 2012 to minus 2.2 this June. The growth of the service sector was the lowest in 11 years at 6.6 per cent, he added.

He also said rupee had devalued by 16 per cent, while the fiscal deficit stood at five per cent of the GDP and forex reserves declined to USD 275 billion, which was “sufficient to meet the needs of three weeks only.” The current account deficit had also risen.

Criticising the government for failing to stimulate savings, promoting job opportunities or turning around the economy by spending more on infrastructure and other projects, Mr. Dasgupta said when there is need to spend more, there is a contraction in government spending.”

Taking on the government for “excessive dependence” on foreign investment, Mr. Dasgupta said, “Nowhere in the world has foreign money developed an economy. Japan was not developed by the U.S. and neither was China developed by Brazil.” Mr. Yashwant Sinha said it was wrong to say Opposition was not co-operating with the government in Parliament. Noting that fall in rupee is because of the “state of affairs,” Mr. Sinha said even if the value goes up to 100 against the U.S. dollar, the Finance Minister would say things are okay. The seed of the current crisis was sown in the last five years (starting 2008-09). “We are seeing the results of the last 5 years,” the former Finance Minister said.

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