None of the BJP promises has materialized - P. Chidambaram
Let me begin by wishing all of you and your families a very happy new year. May the new year bring to our country and to our people, and to all the people of the world, peace, social harmony, economic development and prosperity. On behalf of the Congress party, I wish to share with you some thoughts on the state of the economy and on some other matters of concern.
Economy stuck in a groove
First, the economy.At the beginning of 2015, the Government had confidently predicted that the economy will grow at 8.1 to 8.5 per cent in 2015-16. Many promises of the government more jobs, greater investment and quicker infrastructure development were premised on a high growth of GDP. I am afraid none of the promises has materialized. On the contrary, 2015 has ended on a somber and subdued note. For the whole of 2015-16, GDP growth is not likely to be higher than 7 to 7.3 percent, which means that it will be the same as, or lower than, in 2014-15. The economy is stuck in a groove. The mid-year economic analysis of the Economics Division of the Ministry of Finance has candidly admitted the private investment and exports two of the four drivers of demand are languishing. The Indian economy is like a car running on two wheels. Corporate balance sheets are stressed, net sales have fallen by 5.3 per cent, and profit after tax is flat. Non-food credit growth at 8.3 per cent is the slowest in 20 years. Growth of credit to industry is 4.6 per cent while credit to medium enterprises has actually shrunk by 9.1 per cent. Exports have recorded twelve successive months of decline compared to the same month of the previous year. This is unprecedented.
Distress in Rural India
There is acute distress in rural India, especially in the farm sector. Explicit and deliberate policy decisions of the government have resulted in rural wage growth remaining muted. Minimum support prices have been kept deliberately low. Net sown area for the Rabi season is lower than for the corresponding period of last year. The mid-year Analysis has warned that there are downside risks to agricultural production this year. Just travel through rural India and talk to people in the villages. There is deep resentment about the tardy implementation of MGNREGA, the cut in the average number of days of work and the delayed payment of wages. Crop insurance is unavailable to most farmers. The old age pension scheme has been severely pruned. Banks are reluctant to give jewel loans. Education loans have practically stopped, and the demand for security has discouraged many students and parents from applying for loans. People are unable to point to any central government scheme that is being vigorously implemented. Panchayats are starved of funds. The anger and angst of rural India was reflected in the recent elections.
Urban India, Jobs
Urban India is not much better. Rising prices, especially of food, transport, electricity and water; increase in crime; lack of jobs; and growing intolerance have caused much grief and fear among the people. Women, children and senior citizens have been especially affected. There is no evidence that the promised jobs are being created. The 26th quarterly employment survey conducted between April and June 2015 showed that job creation in the manufacturing and export-oriented sectors fell by a net of 43,000 from the previous quarter. In the same period of 2014, these sectors had added 182,000 jobs. The government does not seem confident of meeting the fiscal deficit target of 3.9 per cent for the current financial year. For 2016-17, the government seems to be toying with the idea of departing from the path of fiscal consolidation already delayed by a year. These are ominous signals, and I would like to caution the government against following an ill-advised policy. Political Climate After the Bihar elections, there were initial signs that the government would reach out to the Opposition and adopt a consensual approach.
That hope was short-lived. As a result, many important legislation remain stalled in Parliament. Let me take the example of the GST legislation. The Congress and some other parties had objected to some provisions of the Bill on weighty and well-reasoned grounds. The government was outright dismissive, until the Chief Economic Adviser virtually endorsed two of the three principal objections and made no recommendation on the third. Yet, the government has not been able to find a way to accommodate the views of the Opposition and pass the GST Bill. I am afraid the government has only to blame itself and its stubborn and unbending attitude.
The government has shown no willingness to engage with the Opposition on any important issue. Whether it is the conduct of foreign policy, relations with neighbouring countries, the rise of intolerance, communal violence, threats to internal security, momentous legal issues pending in Courts or charges of corruption or misconduct, the government seems to have forgotten that India is a parliamentary democracy and the government is accountable every day to Parliament. In our view, the overbearing attitude of the government is mainly responsible for the frequent disruptions in Parliament and the absence of cooperation outside Parliament.
I wish to make particular mention of the troubled relations with Pakistan, Nepal and the Maldives. On Pakistan, more and more people are asking if the government has a clear and consistent policy at all. In Nepal, India seems to have lost the goodwill of all concerned the Government of Nepal, the Madhesi parties and the people of Nepal who have suffered immense hardship over the last four months. Rhetoric, U-turns, and impulsive steps do not make a coherent foreign policy. The people of India are not impressed by the numerous visits made by the Prime Minister to foreign countries. People have begun to ask hard questions on the gains made through these visits. When anything is overdone, there are not only diminishing returns, but it also invites ridicule, as you will find from a cursory survey of the social media.
The role of the Opposition
The Congress, and other parties, are in the Opposition. The role of the Opposition in Parliamentary democracy is well articulated in the old maxim “to oppose, expose and depose.” Our opposition to the government’s wrong policies or poorly-drafted laws or ill-conceived schemes or acts of misconduct or misuse of government agencies cannot be termed obstructionism. Let me remind everyone that we have cooperated with the government in passing 67 and 45 Bills in the Lok Sabha and the Rajya Sabha, Respectively, during the last 19 months. The Congress holds that peace and harmony, economic development and social welfare are paramount.
As a responsible Opposition party, the Congress will support any policy or programme that will advance these goals. The onus, however, lies on the government to win the cooperation of all opposition parties and all sections of the people to take the country on the road of peace and prosperity. Let me end this statement with the hope that the New Year will bless all of us with humility and wisdom even as we renew our pledge, as political parties, to serve the people of India to the best of our ability.
Statement by Shri P. Chidambaram, former Union Finance Minister and Senior Spokesperson, AICC, on January 1, 2016