In a scathing attack on Arun Jaitly former NDA regime finance minister Yashwant Sinha alleges that he 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.
He also alleges that he is 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.
Despite these allegations against Arun Jaitly, Lets do some fact check on what he said.
1: Private investment has shrunk as never before in two decades
Fact: 2016 PE investment at 10 year PEAK!
2. Industrial production has all but collapsed
Fact: IIP is healthy between 2014 and 2016. Picking up again now.
3: Agriculture is in distress
Fact: Kharif and Rabi production in India is at its highest level ever!!
4. Construction industry, a big employer of WF, is in the doldrums
Fact: Iron and Steel consumption at record high!
5. The rest of service sector is also in the slow lane
Fact: 39% growth in IT services over 3 years.
6. Exports have dwindled, sector after sec of economy is in distress”
Fact: Exports growing even after demonetization
He says that Rs 65,000 crore is the input tax credit in July out of total GST collections of Rs 95,000 crore, hinting that GST collections are not robust. This is a gross misreading of the exercise. Sinha should have at least read the government release on this figure.
Firstly, the figure includes tax for months before July and credit on state taxes that have been paid. Secondly, it may also involve taxes under litigation. It is safe to say that coming months may not see such a high figure so Sinha’s comments are clearly inexplicable.
But having said all this, here are some facts we should not ignore. Yes, the economy is slowing down. GDP first quarter growth of 5.7 per cent should make us all worried. So should the state of agri distress and SME troubles because of GST and demonetisation.
Here Yashwant Sinha missed the fact badly to target Arun Jaitly directly and Narendra Modi indirectly. But i will agree with him in case of GDP growth and falling rupee is matter of concern. Lets wait and watch how govt is handling it.
NB:Some contents of this article are taken from Indian Express , Economictimes and @KiranKS