Cong plenary: Chidambaram says next govt will face major economic crisis

The Congress party on Sunday said the country needed to be “rescued from the hands of incompetent economic managers” and Bharatiya Janata Party (BJP)’s philosophical belief in a “coercive economic regime” and “artificial principle of oneness”. Presenting the resolution on the economic situation in India at the 84th plenary session of the Congress party, former finance minister P Chidambaram said the Modi government’s record on managing the economy has been abysmal, and whoever comes in the government 12 months from now will face a major crisis. Chidambaram said four years of Narendra Modi government has, rather than pulling them from it, pushed more people into poverty, that banks were on the brink because of mounting NPAs (non-performing assets) and demonetisation and goods and services tax (GST) have destroyed jobs. “One party which can pull this country out of crisis is the Congress party. I say that not out of arrogance, not out of conceit. I say that because we have done it before and we will do it again,” Chidambaram said in an uncharacteristically combative speech. “To all those worried about the banking system, let me give this assurance. We solved India’s NPA problem at the worst time in 2008-09 after the international financial crisis. We have done this before; we will do it again,” the former finance minister said. The former finance minister has of late been under pressure with his son Karti being investigated in a corruption case and currently in judicial custody.

Alluding to the trials that his family has recently faced, Chidambaram said: “Some thought that I would not stand here today to speak to you and present the economic resolution,” he said. But, Chidambaram said, he drew his courage and strength from each of the Congress workers present in the stadium, and the “steel” in him has been instilled in him because of his 45-years in the Congress party. Chidambaram detailed the “failures” of the Modi government, and asked party workers to spread the message to treat Modi years as a “bad memory”. “We will come back with friends and allies in 2019 and take the country forward,” he said. Chidambaram said the Union Budget 2018-19 has provided no answers to solve the problems facing the country and is the “handiwork” of “completely helpless, completely clueless, completely directionless” government. He credited the successive Congress governments, from Rajiv Gandhi’s to Manmohan Singh-led UPA, to have laid the foundations for the economic growth of the country. Chidambaram said a Congress government would always achieve growth with a human face, and weigh in the favour of the poor and build safety nets. The economic resolution promised an end to tax terrorism and overbearing regulation, large investments by the State in education, healthcare and social safety, a conducive social and policy climate to foster business confidence, reward risk-taking and promote employment with security and focus on human development indicators along with economic indicators. The economic resolution faulted the Modi government’s economic policies that have led to real agricultural GDP and real agricultural revenues stagnating in the last four years. It said there was a difference in the economic policies of the Congress and the Bharatiya Janata Party (BJP). “The Congress party believes in the twin goals of inclusive economic growth through private enterprise, a competitive and viable public sector and a robust social safety net through a strong welfare state,” the resolution said. It stated that the BJP believed in a “coercive economic regime that favours a few, a trickle-down effect for the middle class and leaving the very poor to fend for themselves.” It said the BJP’s economic philosophy “is blind to India’s size, scale and diversity and rests on an artificial principle of “oneness”. The Congress party’s economic vision recognises India’s plurality and a federalist structure that is opposed to the imposition of a “one nation, one policy” doctrine, it said. The economic resolution said the demonetisation decision of the Modi government will rank as one of contemporary India’s most ill-thought and reckless economic misadventures. “I would like to tell the RBI (Reserve Bank of India) officials, why don’t you go to Hundi collectors in Tirupati? They count money faster than you,” Chidambaram said. "The economic resolution said all of the Rs 15,44,000 crore of old currency notes have come back to the RBI, which is still counting the notes! Cash in circulation has reached Rs 17,06,700 crore, which was the level pre-November 8, 2016. It said the decision caused the loss of 100 lives." The economic resolution reiterated the Congress criticism of Modi government’s implementation of the GST. It said the Modi government has allowed the Indian banking sector’s woes to exacerbate and has plunged the sector into a crisis. “The starting point of the banking crisis was the unwarranted criticism of the telecom, coal and power sector policies of the UPA government that was trumpeted by the BJP and that has inevitably brought many telecom and power sector enterprises to the brink of bankruptcy,” it said. The resolution said that as a result, gross non-performing assets of the banking sector have trebled since 2013-14. “Several favoured business persons with contacts in high places have been allowed to defraud the banks. Crony capitalism has been the hallmark of the Modi government’s economic track record. Banks have been forced to write off four times more loans in the last three years than in the entire ten years of UPA,” the resolution said. The resolution said banks have been brazenly looted by the likes of Vijay Mallya, Nirav Modi, Mehul Choksi and Jatin Mehta. “Pinning all the woes of India’s banking sector merely on state ownership of banks is a gross simplification of the problem,” it said. The resolution stressed upon the importance of the public sector. It said the state ownership of businesses in certain critical sectors such as defence production, mass transportation, natural resources and financial services is both needed and justified.