Former finance minister and Bharatiya Janata Party (BJP) leader on Thursday said the introduction of demonetisation and Goods and Services Tax (GST) was ill-timed.
In an exclusive interview to ANI, the former finance minister also spoke about the economy, employment, Finance Minister Arun Jaitley
Here is the full text of the exclusive interview of Sinha:
What made you write the article on the current state of Indian economy?
Yashwant Sinha: We all know that there has been a decline in economic performance of the country in the recent past. This decline is registered quarterly and has been continuing for last one-and-a-half months. So, I was worried about it and thought that the government should do something regarding this. But, I didn't speak up and remained silent at that time. But, I became gravely concerned after I saw the data of the first quarter of this financial year, which showed that the growth rate has come down to six percent. A week passed away, but the government did not take any measure. Therefore, I thought, that some points should be raised in the public domain, and that's what I did.
Do you think this government failed to improve the economy of the country and what is the difference between economic condition in UPA and NDA regime?
Yashwant Sinha: I used to be the spokesperson of the BJP on their financial matters before the 2014 elections. I was always asked by the party to address all financial matters. At that time, we used to talk about economic paralysis in the UPA regime. During the UPA regime, we used to ask the then government to end the economic paralysis by resuming some of the paused projects and improve the condition of banks. So, I had expected that we would follow the same when our government comes to power. We progressed a bit, but the government apparently did not work on these projects with the speed that was expected. So, after being in the government for last 40 months, we can't blame the previous government. We have been given a chance to improve and plug loopholes.
The banks have stopped granting loans owing to their poor condition. Due to this, private investment, which works on bank loans, was stopped. So, the slow-down in the speed of economic condition revival has resulted in unemployment.
What is your take on the GST and demonetisation?
Yashwant Sinha: I was in support of the GST and pitched for its implementation, and even Finance Minister Arun Jaitley said that 'Yashwant Ji has given good suggestions on the GST.' The people who are terming the GST as the second most important reform after Independence were not there at the time we discussed it. I was all alone pushing for the GST in the BJP. Then, the GST was implemented. But the way the GST has been implemented, it has created more problems.
The government should have done proper research before introducing demonetisation. They should have done research on its impact on the economy and employment. It should not be introduced at a time when the economy was already in a poor state and weak.
He further said that the GST gave another blow after demonetisation and affect economic condition adversely.
We had already received a jolt by introducing demonetisation and then, the way the GST has been implemented, it worked as another blow. Will giving two jolts back-to-back not affect economic condition adversely? The GST should not have been implemented on July 1. I suggested that it should be implemented from October 1, but the government was in hurry. The problems are increasing, and that is why I thought that there is need to bring these issues to light so that government takes remedial measures regarding this quickly.
Do you think the economic condition has paralysed?
Yashwant Sinha: No, I won't say that the economic policies have become paralysed. Decisions are being taken and some important decisions have also been taken. When we form a policy, the most important thing we should keep in mind is the people's welfare and another important thing is to improve the performance of the economy. I think, there is confusion in the government. They think the economic condition will improve only through welfare projects, which is not possible. To improve the economy, a separate policy should be there. The first task of the government after coming in power should have been to improve the condition of banks, but we are still awaiting action in this regard. In the long run, we are dead.
What is your take on Union Ministers' claim that India is the fastest growing economy?
Yashwant Sinha: I am not a seasoned economist. It might be possible that Union Ministers Piyush Goyal and Rajnath Singh understand the economy more than me so. They think India is a mountain when it comes to the global economy, however, I don't follow or accept this idea.
What is your opinion about cashless economy which is being pushed by the NDA Government?
Yashwant Sinha: A cashless economy is a good thing, we should move towards it. The ratio is always maintained in other foreign countries. However, in India, where a major chunk of the economy is based in rural areas, the rural area is based on cash transactions. In 1998, when I was the finance minister, I introduced the Kisan Credit Card for the same reason to move towards cashless transaction in rural India. We should move towards it, but demonetisation has done no good and we should use other techniques to achieve that goal.
What steps would you have taken on GST if you were the finance minister?
Yashwant Sinha: I was the finance minister, and if we leave the Congress finance ministers, I am the only finance minister who has presented seven budgets. Nobody in the opposition has ever done that. I have proved myself by doing so many things. When we came to power, everybody had information about the problems. To counter such problems, swift action should have been taken place, some more steps could have been taken.
What is your opinion on the employment crisis India is facing?
Yashwant Sinha: I am constantly saying that economic growth is the only way to generate jobs. Slowing down the economy has never generated jobs in any country of the world. It is our first responsibility to speed up the economic growth. I hope the government wakes up and take all the necessary steps needed. There are several economists who can help the government with their suggestions.
Prime Minister Narendra Modi has formed an Economic Advisory Council to take advice from them. The government should analyze what has happened in the past and then move forward," he added.
Do you think the decline in the economic growth is the result of structural changes?
Yashwant Sinha: No, structural changes result in betterment, not a downfall.
What is your take on appointment of Arun Jaitley as Finance minister?
Yashwant Sinha: I don't have any objection regarding the appointment of ministers. In the party, rules keep on changing. Finance Ministry, Disinvestment, Corporate Affairs and the Defence Ministry, which is so huge being given to Arun Jaitley, and when the Defence Ministry was taken back, he was given charge of Information and Broadcasting. If you burden a minister, where will he have the time to concentrate or address the problems of the economy. That's what I wanted to point out, and there are no personal opinions to be expressed on the appointment of Ministers in the government.