Fiscal deficit to be 3.9% over tax shortfall, economy to slow down: Cong

The Congress on Wednesday brought out a booklet to describe the Narendra Modi government’s performance as one of “five wasted years” with “failures across sectors”. 

Congress leader P Chidambaram and party Rajya Sabha member M V Rajeev Gowda said the “Narendra Modi-Arun Jaitley” legacy was that of an “economy in deep trouble”. He said a shortfall of Rs 1.6 trillion in the tax revenues would effectively increase the actual fiscal deficit to 3.9 per cent and “the economy is expected to slow down further”. 

“Modi-Jaitley’s economic model is of “nationalisation of loss and privatisation of profit”. This model has brought distress to every sector, the only exceptions have been the businesspeople close to the BJP,” he said. 

Gowda-headed Congress research department also released a booklet titled “five wasted years under BJP, failures across sectors”. Chidamabram said macro-economic indicators confirm that the Indian economy has entered a “disastrous phase of slowdown”. He accused Jaitley of perfecting the art of "concealing" data and projecting "doctored" information. 

Pointing to the recent report of the economic division of the Ministry of Finance, Chidambaram said, "The Finance Ministry's report is a damning indictment of the state of the economy in the country.”

He said the current government, between the PM’s rhetoric and the FM’s blogging, has forgotten the economy. The next government has a huge task of reviving the economy. Thankfully, the Congress party is ready to steer the Indian economy out of the Modi-Jaitley slump," the former finance minister said. He said once in power, the Congress will adopt a sectoral approach to revive various sectors of economy and find a solution to each of them, besides consolidating banks.

Chidambaram said that however much the prime minister and the BJP want to take away the narrative from the economy ultimately, what matters to the people of India is the state of the economy. He said the people would ultimately vote on issues that affect their daily lives -- jobs, infrastructure, investment, farmers' distress and debt, ruin of MSMEs, stagnant incomes.

“As we get closer to the end of election and declaration of results, I find that people have begun to find their voices, for example the economic division of the ministry of finance has published its monthly report for March 2019 and that report is a damning indictment of the state of the economy,” Chidambaram said. 

He said the economy has gone to "rack and ruin" and the Finance Ministry's report for March 2019 lays bare the "false propaganda" of the BJP government. The Congress leader said the Indian economy has entered a "disastrous" phase of economic slowdown under the Modi-Jaitley "jugalbandi" reflected by the consistent fall in quarterly growth of real GDP.

Chidambaram said the prime minister’s legacy would be of “Naukri Vinash”, or “job destroying PM”. He said in 2018 India lost over 1.1 crore jobs built on the two "Tughlaqi farmans" of demonetisation and "Gabbar Singh Tax", referring to Goods and Services Tax (GST).

He said the Modi government crushed the rural economy. He said rural wages have stagnated while non-core inflation has grown. He said the country was in the midst of the world agricultural slump in 18-years. Agricultural growth has halved in the Modi government as compared to the UPA years. “Additionally, rural casual labour has also seen an almost 30 per cent decline in employment,” Chidambaram said.

Chidambaram said household savings has declined from 20 per cent in 2014 to 17% in 2018. He said private consumption has also seen a recent decline according to the government’s own reports.

He said average total investments under the Modi government have seen 8 per cent decline versus the UPA years’ average. He said manufacturing investments have followed the same pattern, with the result that number of new factories under the Modi government is a mere 3,400 per year on average compared to UPA average of 10,000. He said new project investments have also seen a slump from Rs 2.8 trillion in December 2016 to less than Rs 1 trillion in December 2018.

The former finance minister also touched upon the “banking crisis” during the Modi government, and weak exports. He said India’s exports have fallen to a 14-year low at a time of a positive world trade climate. “The below par export growth has been accompanied by a sharp rise in imports, leading to a record high trade deficit,” he said.