By Suresh Unnithan

 

New Delhi: Jeering the critics with jokes might help to impress the sycophants. But not anyone with commonsense.  The insalubrious tongue used to snub the former finance minister Yshwant Sinha for his comments on the abrupt demonetization of high valued legal tenders and the hasty implementation of GST has not been taken kindly by the right thinking voters of the country.  Sinha, also a respected economist,  had in an article pointed out “Private investment has shrunk as never before in two decades, industrial production has all but collapsed, agriculture is in distress, construction industry, a big employer of the work force, is in the doldrums, the rest of the service sector is also in the slow lane, exports have dwindled, sector after sector of the economy is in distress, demonetisation has proved to be an unmitigated economic disaster, a badly conceived and poorly implemented GST has played havoc with businesses and sunk many of them and countless millions have lost their jobs with hardly any new opportunities coming the way of the new entrants to the labour market. For quarter after quarter, the growth rate of the economy has been declining until it reached the low of 5.7 per cent in the first quarter of the current fiscal, the lowest in three years.”

Figures put out by the government itself expose the Indian economy has slowed down. The growth rate in the June quarter this year has dwindled to 5.7% from 6.1% in the preceding three months.

Sinha is not any ordinary politician. He was finance minister in the Vajpayee cabinet and then served as foreign minister also in the same NDA dispensation.

Hitting back Sinha for his observations on the current condition of Indian economy by calling him “a job applicant at 80 years” is unacceptable by any standard.  Such insulting remarks from a senior “learned” minister of the Union Cabinet will never be appreciated by the sensible public.

Yashwat Sinha is not the only senior BJP leader to criticize the current plight of Indian fiscal fitness.  A world renowned economic brain and a senior minister in the Vajpayee government Arun Shourie has also pounded the Modi government’s demonitistion and GST. Shourie  belives  both the “reforms” have hit the common man badly and  landed the nation  in an “economic mess”

According o Shourie  demonitisation was the “largest money-laundering scheme ever conceived and implemented entirely by the government”. He said that the demonitisation was an “idiotic jolt” gave opportunity to “everyone who had black (money) converted it into white (money)”.

Lambasting  Modi for hasty decisions like demoitisation  Shourie said  “This is a government by ‘ilhaam’ (revelation). The Prime Minister has the ‘ilhaam’ one night that demonetisation should be done and he does it. In any case, it was a bold step. I have to remind you, suicide too is a bold step,…. Which argument (offered by the government in defence of demonetisation) today survives? Black money? All of it turned white. Terrorism? Terrorists are still coming into India.”

The page no 195 of RBI report 2016-2017  also negates the claims of the government about demonitisation.

At midnight, on 8 November last year, the Modi government demonetise 500 rupee and 1,000 rupee notes worth 15.44 trillion rupees in total.

People holding these notes had to deposit them in their bank accounts. This money could later be withdrawn, though there were restrictions on the amount of money that could withdrawn immediately.

Government was brilliant enough to imagine that black money held in the form of cash wouldn’t be deposited into banks, given that people holding it wouldn’t want to be identified and in the process, a sizable amount of illegal money would be destroyed.

As per the RBI , up to 30 June  the illegal notes worth 15.28 trillion  rupees had been deposited  back in the banks.  This means that almost 99% of the “demonetised” money came back to the banks. Hence, almost all the black money held in the form of cash also made it back into the banks and wasn’t really destroyed. The hasty demonitisation proved a mess.

Further, the Modi government’s claim that demonitiaion was to check fake currency has also fallen apart.

According to the RBI annual report total number of fake 500 rupee  and 1,000 rupee notes detected between April 2016 and March 2017 was 573,891. The total number of notes withdrawn stood at 24.02 billion. This means, the counterfeit notes identified between April 2016 and March 2017  is almost 0% of the withdrawn notes. In the previous year, the total number of counterfeit 500 and 1,000 rupee notes detected were about 404,794. Remember this happened without any demonetisation.

It seems even the Finance Minister Arun Jaitley had no idea on the quantum of black money. At least that is the impression one got from his statement in the Lower House of Parliament on December 16, 2016.

Interestingly, the same Finance Minister snubbed the observations from Yashwat Sinha as the frustration of a “job applicant at 80”.

Sinha dismissed it as “cheap” and said “I consider it below my dignity to respond to it.”

Government’s own data supports Sinha and Shourie that the country is facing a continuous economic down. Industrial output growth plummeted to 1.7% in May from 8% a year ago due to poor performance of mining and manufacturing.

The factory output growth, measured on the Index of Industrial Production (IIP), for April-May period decelerated to 2.3% from 7.3% in the same period last fiscal, as per the data released by the Central Statistics Office.

The output of the capital goods segment, considered as key indicator of investment, was down by 3.9% compared to a high growth of 13.9% recorded in May 2016.

As per a report Bank NPAs mounted to Rs 614,872 crore and is set to rise further, thanks to demonitisation.

The single biggest problem confronting the Modi government is the ever escalating number of unemployment youths.

On November 22, 2013,  at an election rally in Agra  then prime ministerial  candidate Narendra Modi, had promised 1 crore jobs every year if his party won the election.

According to labour bureau statistics, job creation or job growth for 2015 and 2016 (April-December) stood at 1.55 lakh and 2.31 lakh in numbers respectively. Over 10 lakh jobs were created in 2009 under the Manmohan Singh government.

As per the latest  survey of the labour bureau,  in most of the eight biggest employment generation sectors – Textiles, leather, metals, automobiles, gems and jewellery, transport, information technology and the handloom sectors – jobs were shrinking.

This job shrinking is happening when around 1.3 crore youths are entering India’s job market every year

About 19,000 people lost jobs in the gems and jewellery sector in 2015 while around 11,000 workers went out of employment in handloom/powerloom sector. Leather and automobiles sectors saw employment declining by 8,000 each while 4,000 people lost jobs in the transport sector.

Big job providers like Wipro, Infosys, Cognizant, HDFC Bank and the like have recently laid-off people in huge numbers. Wipro removed approximately 1,000 people for ‘non-performance’. HDFC laid-off over 6,000 people.

Reports suggest that there could be a series of lay-offs over next two-three years in the IT sector.  There could be job cuts of about 1.75-2 lakh annually for two to three years.

The two former union ministers, who are also reputed fiscal brains, were just trying to alert the incumbent rulers on the economic emergency looming large on the county. But, Prime Minister Naarendra Modi, instead of taking the observations with seriousness preferred to scoff at the two senior leaders saying “some people do not get sound sleep if they do not criticise the government.”

Better, before going public with your thoughts on Government listen to “Mann Ki Baat.”