FINANCIAL CRISIS IN INDIA- YSHUNDA SINHA

FINANCIAL CRISIS IN INDIA-

YSHUNDA SINHA

സാമ്പത്തികമാന്ദ്യം; നിലപാടിൽ

ഉറച്ച്​ യശ്വന്ത്​ സിൻഹ

Yashwant Sinha writes: The economy is on a downward spiral, is poised for a hard landing. Many in the BJP know it but do not say it out of fear.I shall be failing in my national duty if I did not speak up even now against the mess the finance minister has made of the economy. I am also convinced that what I am going to say reflects the sentiments of a large number of people in the BJP and elsewhere who are not speaking up out of fear.Arun Jaitley is considered to be the best and the brightest in this government. It was a foregone conclusion before the 2014 elections that he would be the finance minister in the new government. His losing his Lok Sabha election from Amritsar was not allowed to come in the way of this appointment. One may recall that in similar circumstances Atal Bihari Vajpayee had refused to appoint Jaswant Singhand Pramod Mahajan, two of his closest colleagues in the party, to his cabinet in 1998. His indispensability was established further when the prime minister rewarded him not only by giving him the finance ministry including the department of disinvestment, but also the ministries of defence and corporate affairs. Four ministries in one go out of which he still retains three. I have handled the ministry of finance and know how much hard work there is in that ministry alone. Finance ministry, in the best of times, calls for the undivided attention of its boss if the job has to be properly done. In challenging times it becomes more than a 24/7 job. Naturally, even a superman like Jaitley could not do justice to the task.

Jaitley was, to begin with, a lucky finance minister, luckier than any in the post-liberalisation era. Depressed global crude oil prices placed at his disposal lakhs of crores of rupees. This unprecedented bonanza was waiting to be used imaginatively. The legacy problems like stalled projects and bank NPAs were no doubt there and should have been managed better like the crude oil bonanza. But the oil bonanza has been wasted and the legacy problems have not only been allowed to persist, they have become worse.So, what is the picture of the Indian economy today? Private investment has shrunk as never before in two decades, industrial production has all but collapsed, agriculture is in distress, construction industry, a big employer of the work force, is in the doldrums, the rest of the service sector is also in the slow lane, exports have dwindled, sector after sector of the economy is in distress, demonetisation has proved to be an unmitigated economic disaster, a badly conceived and poorly implemented GST has played havoc with businesses and sunk many of them and countless millions have lost their jobs with hardly any new opportunities coming the way of the new entrants to the labour market. For quarter after quarter, the growth rate of the economy has been declining until it reached the low of 5.7 per cent in the first quarter of the current fiscal, the lowest in three years. The spokespersons of the government say that demonetisation is not responsible for this deceleration. They are right. The deceleration had started much earlier. Demonetisation only added fuel to fire.

And please note that the methodology for calculation of the GDP was changed by the present government in 2015 as a result of which the growth rate recorded earlier increased statistically by over 200 basis points on an annual basis. So, according to the old method of calculation, the growth rate of 5.7 per cent is actually 3.7 per cent or less.Even the SBI, the largest public sector bank of the country, has stated with unusual frankness that the slowdown is not transient or “technical”, it is here to stay and the slowdown in demand has only aggravated the situation. It has openly contradicted what the BJP president said just a few days ago that the slowdown in the last quarter was on account of “technical” reasons and will be corrected soon. According to the SBI chairman, the telecom sector is the latest entrant to the long list of stressed sectors.

The reasons for this decline are not far to seek nor have they appeared suddenly. They have been allowed to accumulate over time to cause the present crisis. It was not difficult to anticipate them and take counter measures to deal with them. But that called for devoting time to the task, serious application of mind, understanding of the issues and then working out a game plan to tackle them. It was perhaps too much to expect from a person who was carrying the heavy burden of so many extra responsibilities. The results are there for all of us to see.The prime minister is worried. A meeting convened by the prime minister with the finance minister and his officials appears to have been postponed indefinitely. The finance minister has promised a package to revive growth. We are all waiting with bated breath for this package. It has not come so far. The only new thing is the reconstituted Economic Advisory Council of the prime minister. Like the five Pandavas they are expected to win the new Mahabharat war for us.

The performance of the monsoon this year has not been flattering. This will further intensify rural distress. The farmers have received “massive” loan waivers from some state governments varying from one paise to a few rupees in some cases. Forty leading companies of the country are already facing bankruptcy proceedings. Many more are likely to follow suit. The SME sector is suffering from an unprecedented existential crisis. The input tax credit demand under the GST is a whopping Rs 65,000 crore against a collection of Rs 95,000 crore. The government has asked the income tax department to chase those who have made large claims. Cash flow problems have already arisen for many companies specially in the SME sector. But this is the style of functioning of the finance ministry now. We protested against raid raj when we were in opposition. Today it has become the order of the day. Post demonetisation, the income tax department has been charged with the responsibility of investigating lakhs of cases involving the fate of millions of people. The Enforcement Directorate and the CBI also have their plates full. Instilling fear in the minds of the people is the name of the new game.

Economies are destroyed more easily than they are built. It took almost four years of painstaking and hard work in the late nineties and early 2000 to revive a sagging economy we had inherited in 1998. Nobody has a magic wand to revive the economy overnight. Steps taken now will take their own time to produce results. So, a revival by the time of the next Lok Sabha election appears highly unlikely. A hard landing appears inevitable. Bluff and bluster is fine for the hustings, it evaporates in the face of reality.

The prime minister claims that he has seen poverty from close quarters. His finance minister is working over-time to make sure that all Indians also see it from equally close quarters.The writer, a member of the BJP, is a former Union finance minister

മോദി സര്‍ക്കാരിനെതിരെയുള്ള വിമര്‍ശനത്തില്‍ ഉറച്ചുനില്‍ക്കുന്നുവെന്ന് മുതിര്‍ന്ന ബി.ജെ.പി നേതാവ് യശ്വന്ത് സിന്‍ഹ. ബി.ജെ.പി സര്‍ക്കാരിന് ഇത്രയേറെ സമയം ലഭിച്ചിട്ടും ഇനിയും യു.പി.എ സര്‍ക്കാരിനെ കുറ്റപ്പെടുത്തിക്കൊണ്ടിരിക്കുന്നതില്‍ എന്ത് അര്‍ഥമാണുള്ളതെന്ന് അദ്ദേഹം ചോദിച്ചു. നോട്ട് നിരോധനവുമായി ബന്ധപ്പെട്ട് അദ്ദേഹം ഉയര്‍ത്തിയ വിമര്‍ശനം ഏറെ ചര്‍ച്ചചെയ്യപ്പെട്ടിരുന്നു. ഈ സാഹചര്യത്തില്‍ വീണ്ടും നല്‍കിയ അഭിമുഖത്തിലും വിമര്‍ശനങ്ങളില്‍ ഉറച്ചുനില്‍ക്കുന്നതായി യശ്വന്ത് സിന്‍ഹ വ്യക്തമാക്കി. ദീർഘവീക്ഷണമില്ലാത്ത നടപടികൾ കേന്ദ്ര സർക്കാറി​െന അപകടത്തിലാക്കു​െമന്നും സാമ്പത്തിക രംഗം ദുർഘടാവസ്​ഥയിലാകാൻ അധിക സമയം വേണ്ടിവരില്ലെന്നും ഇന്ന്​  അദ്ദേഹം വ്യക്​തമാക്കി.  രാജ്യത്തിന്റെ സമ്പദ് വ്യവസ്ഥ താഴേക്ക് പോവുകയാണ്. അത് ചൂണ്ടിക്കാണിച്ചുവെന്നേയുള്ളൂ. ഇതിന് മുന്‍സര്‍ക്കാരിനെ കുറ്റപ്പെടുത്തിയിട്ട് കാര്യമില്ല. അതിന് പ്രധാന കാരണം നോട്ട് നിരോധനമാണെന്നും അദ്ദേഹം കൂട്ടിച്ചേര്‍ത്തു.

ഇന്ത്യൻ സമ്പദ്​വ്യവസ്ഥ കടുത്ത മാന്ദ്യം നേരിടുന്നുണ്ട്​. ധനകാര്യമന്ത്രി അരുൺജെയ്​റ്റ്​ലി താറുമാറാക്കിയ സമ്പദ്​വ്യവസ്ഥയെ കുറിച്ച്​ താൻ ഇപ്പോഴെങ്കിലും സംസാരിച്ചില്ലെങ്കിൽ അത്​ രാജ്യത്തോടുള്ള കടമ നിർവേറ്റുന്നതിൽ ത​​​​​​െൻറ പരാജയമായിരിക്കും. സാമ്പത്തിക മാന്ദ്യത്തെകുറിച്ച് താൻ പറയുന്നത്​ ബി.ജെ.പിയിലെ ഭൂരിപക്ഷ വ്യക്തികളുടെ അഭിപ്രായമാണ്​. എന്നാൽ പലരും പാർട്ടിയെ പേടിച്ച്​ തുറന്നു പറയുന്നില്ലെന്നും സിൻഹ ലേഖനത്തിൽ പറഞ്ഞിരുന്നു. .അതേസമയം, യശ്വന്ത് സിന്‍ഹയെ തള്ളി മകനും കേന്ദ്ര വ്യോമയാന സഹമന്ത്രിയുമായ ജയന്ത് സിന്‍ഹ രംഗത്തെത്തി.സമ്പദ്ഘടനയെ മാറ്റിമറിക്കുന്ന പരിഷ്‌ക്കാരങ്ങളാണ് കൊണ്ടുവരുന്നതെന്ന് ജയന്ത് പറഞ്ഞു. വസ്തുതകളെ പൂര്‍ണ്ണമായും ഉള്‍ക്കൊള്ളാതെയുള്ള നിഗമനങ്ങളാണ് ഉയരുന്നത്. ജി.എസ്.ടിയും നോട്ട് നിരോധനവുമൊക്കെ പുതിയ മാറ്റങ്ങള്‍ വരുത്താനാണ് കൊണ്ടുവന്നത്. പുതിയ ഇന്ത്യക്കായി ചില പരിഷ്‌ക്കാരങ്ങള്‍ അത്യാവശ്യമാണ്. ജനങ്ങളുടെ ജീവിതം മെച്ചപ്പെടുത്താന്‍ പ്രാപ്തരാക്കുന്നതിനാണ് ഇതെന്നും സിന്‍ഹ കൂട്ടിച്ചേര്‍ത്തു.

Prof. John Kurakar