Call For Elections, Now

UPA inherited a robust economy and brought it crashing to the ground

Piyush Goyal

In a debate on the state of the economy in Parliament last week, finance minister P Chidambarams comments highlighted his disconnect from ground realities, where every section of society the rich, the middle class and the poor, the salaried and selfemployed, the young and old is in deep economic distress. The precipitous fall of the Sensex coupled with the dwindling rupee have exposed the hollowness of his tall claims. Yet, during the debate, instead of responding to members concerns, the FM diverted the discussion into economic theories and challenged the opposition to respond to five questions. Chidambaram never gave me an opportunity to reply there. I reply here. First, he blamed global factors for our domestic woes. Are global factors to blame for retrospective tax amendments and policy flip-flops that have left investors bereft of any faith in India? Are global factors to blame for ministerial turf wars that have held up Rs 7 lakh crore worth of infrastructure projects? Are global factors to blame for the UPA creating only an abysmal 2.7 million jobs, versus 60.7 million created under NDA? He talked of inclusive growth being the reason for low growth. But a growing economy earns the government higher revenues that can be used for social welfare. Gujarat and MP have

demonstrated that inclusion can be dovetailed with growth, designing welfare programmes focussed on skill development and job creation, thereby pulling people out of poverty and making them self-reliant and happy . Under Narendra Modi, Gujarat has the lowest levels of unemployment in the country at 1% and the highest growth rate among large states at 10% CAGR (FY0212). In fact, in agriculture, Gujarat has grown at twice the national average. Under Shivraj Singh Chouhan, MP too consistently posts double-digit agriculture growth. Who does this benefit if not the rural poor and the farmer who toils to feed our people?

Economical with the truth on the economy

Whenever the Congress has come to power, it has driven both interest rates and inflation up. NDA inherited 12.01% interest rate in 1998 and brought it down to 5.8% by 2004, simultaneously reducing inflation
If UPA indeed performed so spectacularly on inclusion, why have we slipped in the UNs Human Development Index rankings from the 127th to the 136th spot? Why are greater proportions of Class V students unable to read Class II texts? Why have we become worse off in global hunger indices ever since the UPA took over? In contrast, Gujarat succeeded in reducing malnu-

trition by 31.9% versus a national average of 9% during 2007-11. Second, under NDA, the current account was converted to a surplus by 2002 and this was sustained till we left office. Shortterm debt was only $4.4 billion and our forex reserves, net of external debt, were also in a surplus. UPA inherited a robust economy and has brought it to grief today , with skyrocketing CAD plus precarious external debt of $390 billion and growing. Short-term debt has grown from 3.9% of external debt in 2004 to 25%, at $97 billion in 2013. I dread to think how we will repay $172 billion in the next 12 months while we also have to finance the current CAD at $80 billion. The FM claims to have maintained forex reserves at the $280-290 billion level but ignores the fact that external debt has sharply risen from $260 billion

(at Rs 45/$) to $390 billion (at Rs 62/$) in under three years. The external debt on every citizen of India has more than doubled! To finance the current years CAD, this government will resort to high-cost borrowing, depreciating the rupee further! Third, the FM makes very patronising statements about fiscal consolidation. The Congress is responsible for gross fiscal profligacy in the last few years and now has the audacity to preach. Even the FY13 target was only met after the FM cut capital expenditure on infrastructure, rural roads, defence and power by Rs 77,000 crore. Interestingly , the expenditure on minority and tribal welfare, which the Congress exploits for divisive vote-bank politics, was also cut by nearly Rs 2,000 crore. Fourth, we were asked if we are for a loose or a tight monetary

policy. We are for an effective monetary policy! Whenever the Congress has come to power, it has driven both interest rates and inflation up. NDA inherited 12.01% interest rate in 1998 and brought it down to 5.8% by 2004, simultaneously reducing inflation. Fifth, the UPA is patting itself on its back for increasing minimum support prices. The reality is that input costs for the likes of fertilisers, diesel, seeds and wages have almost trebled, due to double-digit inflation. Small farmers all over the country are increasingly committing suicide and are no better off under the UPA, as both interest rates and inflation are high. What steps has Chidambaram taken to reduce high input costs and eliminate supply chain woes? The PM has now reasserted that theres no risk of a 1991-like crisis. However, the conditions are identical high fiscal and current account deficits, high interest rates and inflation, capital flight due to waning investor confidence, trade imbalances, negative IIP, burgeoning external debt and possible sovereign downgrade. We have two choices. We can continue living in a state of denial, hoping that the tide will turn miraculously , or get our act together now. It is time the government calls for elections to give people an opportunity to elect an honest, decisive and visionary leader who can transform India into a prosperous, confident and developed nation.
The writer is Rajya Sabha MP and national treasurer of BJP .