Yashwant Sinha stands by criticism, says govt seeing green shoots that don't exist

Moneycontrol News

BJP leader and former finance minister Yashwant Sinha on Thursday defended his critique of the Union government’s handling of the Indian economy, saying he had drawn informed conclusions.

In a newspaper article on Wednesday, Sinha had accused Finance Minister Arun Jaitley for making a mess of the economy and also criticised demonetisation, the implementation of GST and as well as the current methodology to calculate the GDP.

In response, his son and Minister of State for Civil Aviation Jayant Sinha said that some "sweeping conclusions" were drawn from a "narrow set of facts", missing the "structural reforms" transforming the economy.

The senior Sinha hit back on Thursday saying he had looked at both the macro and the micro-economic picture on the economy and labelled the impact by the Goods and Services Tax (GST) and the demonetization move as “disruptions” the economy.

"I have dealt with the facts of the matter and not come up with a narrow conclusion based on selective facts." he said.

"It would be cheap for the matter to be lowered to a father-son conflict on the state of the economy."

Sinha said that if the rebuttal written by his son Jayant Sinha was written out of his own volition, then he would agree to disagree.

The former finance minister said that he was forced to speak to the media after the government doors were shut on him as the Prime Minister and other ministers have not met him on several requests.

On being asked about whether he supports the idea of a fiscal stimulus to boost the economy, he said that he was against the idea as widening the fiscal deficit to boost government spending would have "unintended consequences" on the economy, adding that fiscal discipline was paramount for the economy.

On remedying the current economic slump, he said,"During the UPA government, a policy paralysis had caused close to Rs 25,000 crore worth of projects to be on hold. The first thing that must be done is to check these projects for economic viability.If these projects still are economically viable, they must be carried out.If not, they must be stopped then and there." he said.

This must then be followed by dealing with the non-performing assets in banks, he said.

Sinha stated that the reason for a lack of domestic investment is the lack of demand in the economy, which is causing for the underutilisation of capacities.

He stated that stoking the demand for investment goods in the private sector and the Public Private Partnership sector is necessary for the revival of the economy.

On the implementation of the Goods and Services Tax (GST), Sinha stated that the current NDA government should have brought out a maximum of three rates. He pointed out that the lack of readiness of the GSTN network, the complications in filling out the forms, which needed the help of professionals like Chartered Accountants have made it difficult for the operation of small businesses.