Economic situation in May 2014 was worse than what it seemed: PM Modi

Says he chose not to disclose true state of economy at the time in the national interest, as it would have hurt markets and sentiment

Prime Minister Narendra Modi on Friday said in a TV interview to Network18 that he suffered political damage for his decision to not issue a white paper on the state of the economy when his government took over in May 2014. He said the sluggish private investments was a continuing fallout of the economic conditions that prevailed when he took office two and a half years back but his government has resisted the temptation to take shortcuts, the positive results of which are now evident across several sectors.

In the interview, the PM he spoke on a wide range of issues, from Lutyens' culture, atrocities against Dalits, the Kashmir situation, and the forthcoming elections in Uttar Pradesh.

Modi said the economic situation in May 2014 was much worse that it seemed on the surface. Modi said he was confronted with a choice of whether to be politically expedient and put the poor state of the economy in the public domain, or keep the interest of the nation uppermost. He said his government had even mulled tabling a white paper on the economic condition in Parliament before the presentation of the first Budget.

"But that would have dragged the economy even lower, markets would have been badly hit, increased hopelessness, affected the market and the world's view of India would have become worse. It would have got very difficult to pull out the economy out of such (a) morass," he said. Modi said this was a reason why his government didn't make public the jugglery that was done in previous Budgets (during UPA rule) and the condition of non-performing assets (NPAs).

The PM said he opted to be silent in national interest even at the cost of political damage. "It hurt us, we were criticised. It was made to look like it was my fault. All these issues from the past impacted private investment," Modi said. The PM said the positive fallout of this has been that he is now being able to address these issues.

The PM said India is currently among the world's fastest growing economies but experts point out that private investment is yet to pick up. He said a reason could be because his government has "tightened the screws" on the issue of NPAs in the banking sector. Modi said he held a meeting with bankers and told them that there would be no phone calls (on issuing loans to industrialists). 

"Despite that, the pace at which roads are being made, railways is expanding, there’s a six-fold increase in electronic goods manufacturing, these things show we haven't taken shortcuts. And my motto is like what you see on railway platforms - 'shortcuts will cut you short'. We don't want to take any short cuts and the results are showing," he said. Modi said that in the years to come it will be a matter of surprise when unbiased people sit down to analyse the choices his government has made on the economic front.

The PM also spoke on the upcoming Assembly elections in five states, including Uttar Pradesh. He said the Bharatiya Janata Party (BJP) will contest the elections on the issue of development. Modi said the poison of casteism and communal polarization and that of vote bank politics had witnessed a weakening in the 2014 Lok Sabha polls. “A large section of the society has moved towards this politics of development. I hope in the days to come the people of UP, for the betterment of their state, will also move towards this politics of development,” he said.

On atrocities of Dalits, the PM said such incidents had no place in a civilised society. He, however, said that law-and-order was a state subject. He said the number of atrocities on Dalits and incidents of communal violence have come down during the two and a half years of his government when compared to the UPA rule.

“There has been a conspiracy to selectively raise these issues to defame Modi,” he said, adding that the BJP currently has more tribal Members of Parliament and state legislators than any other party. The PM said his espousal of the Dalit cause and celebrating the contribution of Dr B R Ambedkar had made those people nervous who believe the Dalit vote is their fiefdom. “But I am committed to the welfare of Dalits, tribals, women and other deprived sections of the society,” Modi said.

He, however, advised his party leaders to desist from making irresponsible statements in the media for any particular group of people or community. Modi said television crews are in a race for TRPs (Television Rating Points) but leaders need to show maturity in what they say.