Former Finance Minister P Chidambaram, who had always been critical of the Modi Government's economic policies from Demonetistion to GST on January 6 once again slammed the Modi Government. "The worst fears of an imminent economic slowdown have come true. Modi Government's tall claims of India growing at a 'robust' growth rate have evaporated in thin air. No amount of sugar coating, false bravado and rhetoric along with headlines management can conceal the stark reality," he said.
Claiming that the Congress' fears have indeed come true, he pointed out that, "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. 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."
He also provided a "dispassionate assessment" of the Economic status under the ruling government, which reveals "serious weaknesses in the Indian economy"
Below are the observations made by the former finance minister.
(i) 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.
(ii) Anticipated growth of real GVA at basic prices in 2017-18 is 6.1 percent as against 6.6 percent in 2016-17.
(iii) 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% and 2.3% respectively in the last two quarters.
(iv) GVA at basic prices for 2017-18 from 'manufacturing' sector is estimated to grow by 4.6 percent as compared to growth of 7.9 percent in 2016-17.
(v) 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.
(vi) New project announcements by Indian companies touched a 13-year low of Rs77,000 crore in the December quarter, the project-tracking database of the Centre for Monitoring Indian Economy (CMIE) shows. The manufacturing sector has seen the sharpest fall in new project announcements.
(vii) Overall though, the investment picture remains bleak.
(viii) Fiscal Deficit is likely to overshoot the budget estimates of 3.2% of GDP.
(ix) 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?
(x) Bank Credit Growth is extremely sluggish which doesn't bode well for the economy.
"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," Chidambaram added.