Congress leader P. Chidambaram on Saturday attacked the Narendra Modi government over its management of economy, saying the worst fears of an imminent economic slowdown have come true and job creation remains the ruling BJP’s “single biggest failure”.
In a statement a day after estimates that GDP would be 6.5 per ent in 2017-18, the former Union Finance Minister said the government’s tall claims of India growing at a “robust” growth rate have evaporated in thin air.
“The recent social discontent therefore can be a direct manifestation of this economic slowdown, which the government was conveniently hiding. It is time government stops making tall claims and bends down to do solid work,” he said.
Chidambaram said that the investment picture remains bleak in overall terms and the fiscal deficit is likely to overshoot budget estimates of 3.2 per cent of the GDP, adding that “no amount of sugar coating, false bravado and rhetoric along with headlines management can conceal the stark reality”.
“Our fears and warnings have proved true. GDP growth in 2015-16, 2016-17 and 2017-18 (est) is 8.0, 7.1 and 6.5. These numbers prove there is a slowdown. A decline in economic activity and growth means loss of millions of jobs,” he said.
“New project announcements have declined, fresh investment is low, informal sector is still reeling under the ill-effects of demonetisation, job creation is abysmal, exports are plunging, manufacturing sector growth has slowed down, agriculture sector has been hit hard and rural despair is abundant.
“A dispassionate assessment reveals serious weaknesses in the Indian economy,” he said.
Chidambaram said the growth in GDP during 2017-18 is estimated at 6.5 percent as compared to the growth rate of 7.1 per cent in 2016-17 and anticipated growth of real GVA (gross value added) at basic prices in 2017-18 is 6.1 percent as against 6.6 percent in 2016-17.
“The ‘agriculture, forestry and fishing’ sector is likely to show a growth of 2.1 per cent in its GVA during 2017-18, as against the previous year’s growth rate of 4.9 percent. This was 1.7 per cent eand 2.3 per cent respectively in the last two quarters,” he said, adding that GVA at basic prices for 2017-18 from manufacturing sector is estimated to grow by 4.6 percent as compared to 7.9 per cent in 2016-17.
“In a double whammy, retail inflation soared to a 15-month high of 4.88 per cent in November and industrial output slowed to a three-month low of 2.2 per cent in October,” he added.
New project announcements by Indian companies touched a 13-year low of Rs 77,000 crore in the December quarter, according to the Centre for Monitoring Indian Economy, he said.
“The manufacturing sector has seen the sharpest fall in new project announcements. Job creation remains the single biggest failure of this BJP Government. In a slowdown, how will jobs be created? And how will the promised 2 crore jobs per year be created?”
Bank credit growth is extremely sluggish which doesn’t bode well for the economy, Chidambaram added.