Economy

Government ruining economy by its monumental mismanagement, says Congress

Former Union Minister and Congress leader Anand Sharma. File

Former Union Minister and Congress leader Anand Sharma. File   | Photo Credit: Shiv Kumar Pushpakar

NSO data shows that the GDP for the third quarter is at 4.7%, which is the lowest of the last seven years, Mr. Sharma said.

A day after the NSO (National Statistical Office) data released by the Narendra Modi government revealed that the GDP (gross domestic product) has hit a seven-year low at 4.7%, the Congress on Saturday hit out at the government for continuing to remain in denial.

Union Finance Minister Nirmala Sitharaman had said in her budget speech that the economy is on the road to recovery and showing green shoots.

At a press conference, Rajya Sabha member and Congress spokesperson Anand Sharma said the government had ruined the economy by its “monumental mismanagement”. He expressed concern that the nominal GDP that also took into account the inflation data was in single digits which, he said, was first time in decades. “It’s a matter of grave concern which has not happened in decades that in two consecutive quarters, the nominal GDP remains well below 10% because it factors in the inflation”.

 

Mr. Sharma said that if the expenditures on defence, public administration and other services of the government were taken out, the actual GDP growth of the third quarter was 3.7%. This was inexplicable, because this quarter historically showed the strongest growth because it was after the Kharif crop, so there was growth in agriculture that income came was factored in the Gross Value Addition and in the nominal GDP and the real GDP. Also, the third quarter numbers were of the festive season when people usually splurged and there was a spike in consumption. “That has not happened. So, even in the festive season, people have not spent because people have no money” . 

What was of urgent concern was that manufacturing remained in the negative and investments had taken a hit. “Gross Fixed Capital Formation, which actually is the only measure of the economy growing and tangible investments going for creation of new assets, new factories and job creation that remains in the negative,” he stated. 

Low revenue receipts

 The government was also staring at a huge fiscal deficit and unmanageable revenue deficit. Revenue receipts were very low. The government’s budgetary projections were based on revenue receipts of ₹26 lakh crore; whereas up to December, the total revenue receipts had been ₹11 lakh crore. He expressed doubts about the government actually getting ₹15 lakh crore in the last quarter. 

At such a time of downturn, Mr. Sharma said, the budget was pedestrian and it even had platitudes. It cut funds for essential programmes such as mid-day meal scheme or the Mahatma Gandhi National Rural Employment Guarantee Act. 

“We have advised the government to immediately give money in the hands of the poor by making MGNREGA need based for 150 days in a year, the daily wage of ₹500 to revive rural demand and economy. The government cannot remain in denial,” he said adding that the economic downslide had started, showing an adverse impact on social stability and peace in the country. 

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Printable version | Apr 4, 2020 5:32:16 PM | https://www.thehindu.com/business/Economy/government-ruining-economy-by-its-monumental-mismanagement-says-congress/article30950996.ece

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