‘Current economic climate poses challenge for the next govt’.
The opposition Bharatiya Janata Party (BJP) today called on the government to respond to the “present economic crisis” and take specific measures to bail out companies in civil aviation, real estate, automobile, textiles and gems and jewellery sectors and help them tide over the slower consumer demand and rising costs.
In a joint briefing today, BJP leaders and former finance ministers Jaswant Singh and Yashwant Sinha, accompanied by former Communications and Disinvestment Minister Arun Shourie, said unless the government took immediate “sector-specific steps”, and that too on a large scale, “companies would start shutting shop and lay off employees in large numbers”.
“This will then spill over into the banks as defaults will rise. If all this is not done, we are staring at a truly horrendous situation for the Indian economy”, Sinha told reporters here today.
“A sector like civil aviation cannot be allowed to collapse. It is not a symbol of prestige but a necessity,” said Singh. This is the second major statement on the current economic situation that the BJP has made this month. Earlier, on October 14, the party had come up with a dozen-odd demands, including lower interest rates, inclusion of oil bonds in the SLR category, judicious use of foreign exchange reserves and discontinuing Participatory Notes (P-notes), an investment route for overseas investors who are not registered in India. Earlier this month, the stock market regulator had relaxed restrictions in order to encourage fund inflows.
Charging the government with “criminal determination to not do anything”, the BJP leaders said economic growth was being choked due to lack of urgency by the UPA leadership. They also alleged that “there is a definite design to the inaction”.
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The BJP also reiterated its demand for banning short selling. “Naked short sales are being used to beat down valuations of Indian industry. The stock market is being manipulated. India is being singled out as one of the most vulnerable Asian emerging markets due to its current account deficit, large fiscal deficit, and reliance on portfolio and debt flows,” the party said.
“Other countries, even conservative governments like Japan, have acted to plug misuse of such devices. Our government has doggedly refused to do so”, it added.
Asked what the BJP would do on the economic front if it came to power next year, the BJP leaders stopped short of spelling out specifics but warned that whoever won power would have a tough time managing the economy. Crucially, the BJP charged the government with ignoring constructive suggestions. “At the height of the 1991 economic crisis, the Narasimha Rao government had called an all-party meeting and sought views from everyone concerned. This government does not reach out”, said Sinha.