A day before the government presents the Economic Survey, former Prime Minister Manmohan Singh and former Finance Minister P. Chidambaram released the Congress' “real state of the economy” report for the last two years.
“A day before the Economic Survey, we thought we should bring out a document that sets out what we consider as a dose of realism, so that the country as a whole has ways and means of finding or assessing where the economy is...,” Dr. Manmohan Singh said.
“That the Indian economy is not in a good shape is obvious. Even the International Monetary Fund has projected that growth rate of India in this current fiscal year will not be 7.6% but less than 6.6%. Several other rating agencies have also made similar projections,” he noted.
Mr. Chidambaram said that the state of the economy had to be assessed in terms of job creation, credit growth, etc.
He said that just 77,000 jobs had been created between July and September, 2016, of which 50,000 had been created in the government. Credit growth, now at about 5%, was the lowest in decades, he pointed out.
“Optimism must stem from realistic assessment. The NDA government tends to believe in an exaggerated version, in an exaggerated picture, of the economy,” Mr. Chidambaram noted.
Later, Congress leader Rajeev Gowda summarised the key highlights of the report: job creation had shrunk 90% from 11 lakh new jobs in 2010 to less than 1.5 lakh new jobs in 2016, as against a promise of 2-crore jobs per year; the “real” road construction was just about 6 kilometres a day; while there was talk of bullet trains, many railway accidents were taking place; private investment was going down; 800 start-ups founded after 2011 have shut shop and exports were stagnating.
He added that demonetisation came on top of these and tractor, two-wheeler sales had shrunk after it. Mr. Gowda said some assessments maintained that the slowdown would last a few years.
The report urged the government to focus on fiscal consolidation, but subject to the requirement of well-planned social sector spending, which was necessary.