Prince Charles launches education impact bond for India

New Delhi, Feb 10: Former finance minister P Chidambaram on Monday tore into the Modi government's handling of the economy, saying it was close to collapse and was been attended by "very incompetent doctors."

Initiating the debate on the Union Budget for 2020-21, he said rising unemployment and falling consumption was making India poorer.

The economy, he said, is facing demand constraints and is investment starved. The economy is facing fall in consumption and rising unemployment.

"Fear and uncertainty prevails in the country," he added.

He said the chief economic advisor to the BJP government for four years, Arvind Subramanian has stated that the economy is in the ICU. But "I would say the patient has been kept out of ICU and incompetent doctors are looking at the patient," Chidambaram said.

"It is dangerous to have a patient out of ICU and being looked upon by incompetent doctors. What is the point standing around and chanting slogan 'Sab ka saath, sab ka vishwas'," he said, adding every competent doctor the Modi government could ever identify has left the country.

His said a list of such people included former RBI governor Raghurman Rajan, former CEA Arvind Subramanian, former RBI governor Urjit Patel and former NITI Aayog vice chairman Arvind Panagariya.

"Who are your doctors, I want to know," he said, adding the government considers Congress as untouchable and doesn't think of any good about the rest of the opposition and so doesn't consult them.

Chidambaram charged that instead of putting money in the hands of people, the Modi government "put money in hands of 200 corporates" by way of corporate tax.

He said Finance Minister Nirmala Sitharaman in her 160- minute budget speech did not talk of the economy and its management.

"You are living in echo chambers. You want to hear your own voice," he said.

Listing problems with the Modi government, Chidambaram said it refuses to admits in mistakes, lives in denial and has predispositions.

The demonetisation of old 1000 and 500 rupee notes, as well as the hurried implementation of the Goods and Services Tax (GST), are "monumental blunders" that ruined the economy, he said, adding the Modi regime is predisposed to protectionism, a 'strong' rupee and is against bilateral and multilateral agreements.

"It is living in denial," he said, adding the economic growth has fallen for hereto unseen six consecutive quarters.

He wondered on the narrative Finance Minister Nirmala Sitharaman was trying to give after reading out a 160-minute budget speech with few pages left unread.

Her budget neither made any reference to the Economic Survey nor picked up a single idea from it, he said.

Chidambaram, who is credited with presenting a 'dream budget' more than two decades back, said the GDP growth has declined for six consecutive quarters, agriculture is growing by just 2 per cent, while consumer price inflation has risen from 1.9 per cent in January 2019 to 7.4 per cent in a matter of 11 months.

Also, food inflation is at 12.2 per cent. Bank credit is growing 8 per cent with non-food credit rising by 7-8 per cent and credit to industry by just 2.7 per cent. Credit to agriculture has declined from 18.3 per cent to 5.3 per cent and that for MSMEs from 6.7 per cent to 1.6 per cent.

Overall industrial index showed just 0.6 per cent growth. "Every major industry is either near zero or in negative zone," he said, adding thermal power plants are operating at just 55 per cent of the capacity as factories have either closed or are on the verge of closure.

"That gives you a good picture of the state of economy. You don't require MRI," he said. "You are in management for six years. How long can you blame previous managers."

He charged the government with burying unfavourable reports such as the labour survey that put unemployment at 45 -year high of 6.1 per cent at end of 2017-18. Also, consumer expenditure has falling to 3.7 per cent between 2011-12 and 2017-18.

Drilling holes in Budget numbers, he said the 2019-20 budget projected a nominal GDP growth of 12 per cent but ended with just 8.5 per cent. Fiscal deficit was targeted to be shrunk to 3.3 per cent of the GDP but ended by at 3.8 per cent and in the next fiscal it is being targeted at 3.5 per cent.

Revenue deficit was targeted at 2.3 per cent in fiscal ending March 31, 2020 but ended up at 2.4 per cent and in the next it will rise to 2.8 per cent, he said, adding capital expenditure in the next fiscal will shrink to 0.7 per cent from 1.4 per cent in the current.

Net tax revenue in the current fiscal was targeted at Rs 16.49 lakh crore but only Rs 9 lakh crore was collected in first nine months till December 2019 and "you want us to believe this will rise to Rs 15 lakh crore by March 2020," he said.

Similarly, expenditure in 2019-20 was pegged at Rs 27.86 lakh crore but only Rs 11.78 lakh crore spent during April- December and by March this is projected to rise to Rs 27 lakh crore.

"You have no money to spend... and these are masked by numbers," he said. "Numbers are not easily acceptable or believable."

Chidambaram said the government is facing shortfall in all forms of taxes - Rs 1.56 lakh crore on corporate tax, Rs 10,000 crore on personal income tax, Rs 30,000 crore on customs, Rs 52,000 crore on excise and Rs 51,000 crore on GST.

This despite "the extraordinary powers" and "all kinds of power" given to lower level tax officials, he said.

He read of list of heads under which allocation has fallen - food subsidy, agriculture, PM-Kisan, rural roads, mid-day meal scheme, ICDS, skill development, Ayushman Bharat, rural development and MGNEGA.

Washington, Feb 1: The Indian economy experienced some abrupt slowdown in 2019 due to turbulence in non-banking financial institutions and major reform measures such as GST and demonetisation, but it is not in a recession, IMF Managing Director Kristalina Georgieva has said.

"The Indian economy indeed has experienced an abrupt slowdown in 2019. We had to revise our growth projections, downwards to four percent for last year. We are expecting 5.8 per cent (growth rate) in 2020 and then an upward trajectory to 6.5 percent in 2021," Georgieva told a group of foreign journalists here on Friday.

"It appears that the main reason for this slowdown was the non-banking financial institutions experiencing a turbulence," she said on the eve of Union Finance Minister Nirmala Sitharaman presenting the annual budget in Parliament on Saturday.

She said India had undertaken some important reforms that over the longer term would be beneficial for the country, but they do have some short-term impact.

"For example, coming with the unified tax system, and the demonetisation that took place. These are steps that over time are beneficial, but of course they might, might be somewhat disruptive over short term," Georgieva said in response to a question.

The International Monetary Fund (IMF) Managing Director said that there is not a lot of fiscal space in India. “But we also recognise that the policies of the government on that side, on the fiscal side have been prudent. We will see how the reading of the budget, the submission of the budget goes, tomorrow,” she said.

In the medium-term, she said, the IMF remains optimistic about India. “This is why we see that upswing potential for the growth in the country,” she said.

Georgieva said that the current economic slowdown cannot be described as a recession. "No.... You're far from that. But it is a significant slowdown, not the recession," she said.

The IMF managing Director noted that the consumption in India also slowed down and that contributed to the overall slowdown in the economy. The IMF would be keen to see what India does to get relatively sound macroeconomic fundamentals to pay off in terms of better growth trajectory, she said ahead of the budget.

One thing that is important for India is that budgetary revenue have been below target. "The country knows that. The finance minister knows it. They need to increase budgetary revenue collection so they can improve their fiscal position. I said it's tight on the spending side, but I also want to stress that there is room to improve collection on the revenue side," she said.

New Delhi, Jan 18: Asha Devi, the mother of the 2012 Delhi gang-rape victim, on Saturday slammed senior lawyer Indira Jaising for her suggestion that she should forgive her daughter's rapists.

"Who is Indira Jaising to give me such a suggestion? The whole country wants the convicts to be executed. Just because of people like her, justice is not done with rape victims," Asha Devi said here.

"Cannot believe how Indira Jaising even dared to suggest this. I met her many times over the years in Supreme Court, not even once has she asked for my well being and today she is speaking for the convicts. Such people earn their livelihoods by supporting rapists, hence rape incidents do not stop," she added.

Asha Devi further accused Jaising of using "the garb of human rights" to make a living.

'People like her keep earning money under the garb of human rights. I do not need her suggestions... Just because of people who think like her incidents like rape keep happening, she is a disgrace to women," she said.

Earlier yesterday, Indira Jaising, through a tweet, had urged Asha Devi to forgive the perpetrators and had used the example of Congress interim president Sonia Gandhi, who had forgiven Nalini, one of the convicts who was given the death penalty by the courts.

"While I fully identify with the pain of Asha Devi I urge her to follow the example of Sonia Gandhi who forgave Nalini and said she did not want the death penalty for her. We are with you but against the death penalty," Jaising's tweet read.