Where are the jobs, asks Congress

MMS, Chidambaram release party's own Eco Survey slamming Modi govt's flagship schemes, note ban

A day before the release of the official account on the state of the economy, the Economic Survey, the Congress party tore apart the government for hiding behind the dazzle of the GDP number, and ignoring key metrics such as jobs and investment.

It released its own detailed report titled 'The Real State of Economy 2017', fielding its two most senior leaders in these matters, Manmohan Singh and P Chidambaram. Introducing the report, which he claimed was "closer to the truth that what I believe the government will say tomorrow", Chidambaram launched a broadside on the performance of the economy under the Modi government.

The report put together by Rajya Sabha member and IIM professor Rajeev Gowda pointed out the fact that against the election time claims of creating 20 million jobs, only 1.5 lakh jobs were created last year.

"There are no jobs, capital formation is declining and credit growth at 5 per cent is the lowest in several decades. Yet if the government presents a rosy picture of the economy, people of India are entitled to question that conclusion. Every government must be optimistic, but such optimism should stem from realistic assessment of the situation," Chidambaram said.

Recalling the UPA's record, Congress claimed the delivery of average growth rate of 7.5 per cent amid international crisis and lifting of 140 million people out of poverty are two achievements "any government should try to emulate, if possible exceed."

Accusing the Modi government of hiding behind a dazzle of a number called GDP, Chidambaram alluded to the doubts on the figure on "change of base year" and "the wrong choice" of deflators. "People of India are not dazzled by the numbers. They are asking hard questions: Where are the jobs? Where is new capital investment? How are businesses being helped to grow and expand and employ more people?" he added. On the proposal to bring back Banking Cash Transaction Tax, Chidambaram felt bringing it back after 12 years in 2017 was not a good idea.

Congress report pointed out that gross fixed capital formation declined over the last two years. During July, August and September 2016, only 77,000 jobs were created in the country, of which 50,000 were in government. And credit growth fell to a multi decade low.

Singh said that the Indian economy is not in a good state was obvious. "Even IMF has downgraded our GDP growth to below 7 per cent. The report is a contribution to the ongoing debate on economy and shows ways to put it on the right track."

The report attacked several flagship schemes of the Modi government such as Skill India, Make In India, Start Up India and Swachch Bharat Mission. It also analysed the demonetization move in a separate chapter and wondered if it was attack on black money or attack on the poor. "Ironically, a policy primarily touted to unearth black money from the rich and corrupt, has hit the poor the hardest, while the black money holders, by and large, have laundered their money back into the banking system. The pain unleashed on the Indian people and the economy is completely unjustified. Therefore, there is no doubt that demonetisation is a misguided policy and a monumental blunder," the state of the economy report said.

Cong criticism on key government schemes

Skill India: This initiative has not worked out and the NSDC CEO and COO both resigned a month before Minister Rajiv Pratap Rudy admitted in a speech to CII that this thrust had failed.

Make in India: The Make in India program was launched in September 2015, but an examination of FDI inflows since the announcement suggests that the services sector is still the recipient of the highest proportion of FDI (around 17%), while employment-intensive manufacturing sectors such as automobiles lag far behind. The aggregate FDI inflow over three years does not appear to be headed even close to the $500 billion promised by the massive deals signed by the government.

Start Up India: The sad reality is that in 2016, the startup sector was plagued by fund crunch, with a 42.7% fall in funding. At least 800 start-ups founded after 2011 have shut shop, signaling a deteriorating health of the sector, according to data analyst firm Tracxn Technologies

Swacch Bharat Mission: The real tragedy is that toilets are now being constructed through orders bullying citizens through refusing ration and electricity supplies, levying fines and withholding payments, if toilets are not constructed.

Nirbhaya Fund: Why Does the Money Still Lie in Coffers? From the 1000 crore amount that was credited to the fund's account in January 2014, only 200 crores had been sanctioned by 2015. This was for emergency SMS alert project and safety of women in public transport.

Demonetisation was an ill-conceived policy choice based on incorrect assumptions, and was disastrously implemented.

Highlights of Congress State of the Economy report

Less than 150,000 new jobs created in all of FY16, vs 20 million target

Aggregate FDI inflow over three years way behind to $500 billion promised by massive deals signed by govt

Start-up sector plagued by fund crunch in 2016, with 42.7% fall in funding

Worsening financial position of smaller firms as seen in the financial statement for 2015-16, may have become much worse in 2016-17 due to demonetisation-induced cash crunch

No pick-up in investments after new government took over in May 2014. On the contrary, after nearly two years of lacklustre investments, investment climate has started to deteriorate in 2016-17

2016-17 appears to be a washout with capital formation shrinking. Gross fixed capital formation has declined in each of three quarters of 2016 compared to same quarters of 2015

Projects whose implementation is stalled account for 12% of total stock of projects under implementation. This ratio has risen sharply the past three years and continues to remain very high

A worrisome factor relating to investment projects in last two years is the rise of adverse business conditions as the reason for projects being stalled. The marginal improvement in Ease of Doing Business Index notwithstanding, promoters of projects are not too enthusiastic on proposing new projects or even pursuing existing ones

Over the second week of January 2017, bleak projections have already been sounded. The IMF has cut GDP growth rate projection for India from 7.6% to 6.6%, CMIE has reduced its outlook to 6%