BJP leader Subramanian Swamy today said the economy is "sick" and heading for a crash by 2014 due to the falling Rupee and other ills and hit out at RBI Governor Raghuram Rajan for increasing the Repo Rate.
Swamy, a noted economist, alleged that the move shows Rajan's short-sightedness and foreign mentality and demanded his immediate removal.
"His economics has been known to be the same as that caused the US Depression of the 1920s, namely, following a conservative fiscal policy. Just when investment and capital market needed an injection of adrenalin, Dr Rajan asphyxiated the investor. By mid-2014, the government will be on the verge of default of payments," Swamy said.
He was speaking to reporters at his maiden press conference after merging his Janata Party with BJP last month.
Calling for a new reform policy, the BJP leader said India has forex reserves of only USD227 billion and there is danger of reverse of short-term capital outflow by panic cashing of Participatory Notes, hawala operations and rigged short-selling of the rupee abroad.
Swamy cautioned that any crisis in the country will lead to outflow of this money.
He also maintained that the balance of payments is skewed as our imports are higher. "Balance of payments' current account deficit as a ratio of GDP is highest since 1990, at 4 per cent," Swamy said.
The BJP leader also referred to the falling Rupee and said while it had dropped by only Rs 4 to a Dollar between 1999 to 2004 when NDA was in power, the slide has been of Rs 23.42 in the last nine years of UPA rule.
He said India's household savings- which is the highest in the world- has fallen due to price rise.
