Inflation, disinvestment are big worries: Yashwant Sinha

Former Finance Minister Yashwant Sinha today rapped the UPA government for pushing the economy into high inflationary-interest rate cycle and creating "total confusion" over the disinvestment programme.

"We will again lapse into a high inflation and high interest rate cycle, which will not do any good to Indian economy," Sinha said in his address to the Ficci annual general meeting here.

He said the NDA government controlled inflation and brought down interest rates, which benefited the economy as a whole, especially the manufacturing and capital goods sectors

"Sector after sector and unit after unit benefited from low inflation and low rate of interest. Your (Industry's) problem was cost of funds, infrastructure, overstaffing and over capacity, which was addressed by reduced prices and soft interest rates," he said.

"If Industry, manufacturing and services are doing well today, this is not the achievement of this government. In today's reforms, there is nothing that we did not start in our time," Sinha said.

Sinha attributed his defeat in the last Lok Sabha elections to the fall in EPF rates. "My constituency has a huge coal mining area and my opponents branded me as anti-worker."

Sinha also castigated the government for being confused over the disinvestment programme. "There is complete confusion as far as disinvestment and privatisation is concerned. Has one unit been divested by this government," he asked.

Sinha said additional resources raised through disinvestment could have been used for greater equity.

Sinha said there was no consensus on economic reforms across political spectrum. "While there is strong support at the middle of political class, both extreme oppose them."

He said the government would not be able to achieve a sustained growth rate unless it carried out third generation economic reforms."Sustainability of reforms can only ensure the growth trajectory that we have set for ourselves."

On labour reforms, Sinha said workforce in the organised sector, which constitutes just 7 per cent of the total labour, are coming in the way of the third phase of economic reforms.

Seven per cent of the workforce was organised against 93 per cent, which did not have any safeguards, he said.

Pointing out that growth is a prerequisite for social justice, he said the nda government achieved over 8 per cent growth through sustained hardwork and economic reforms with all sectors posting impressive figures and sensex booming. "Many think that we lost elections-2004 because of economic reforms but this is not correct. There may be other reasons that we have to find out," he said.

Pointing out that decline in agricultural contribution to GDP was not matched by proportionate fall in dependence on agriculture, Sinha said greater opportunity will have to be created in rural areas to check migration to cities.

In this context, he said in certain sectors reservation cannot overrule merit. "We don't have reservations in the defence or judiciary and we don't choose doctors on the basis of castes," Sinha said adding that rural masses should be equipped with employability.

He, however, said his views on reservation were entirely personal and do not reflect the BJP's stand.