Yashwant Sinha's comments on economy: How his son Jayant, other ministers sprang to govt's defence

After former finance minister Yashwant Sinha wrote a scathing article in The Indian Express on Wednesday criticising the government's mismanagement of the economy leading to a crippling slowdown, the government has swung into action defending its policies and recent moves.

Sinha's criticism triggered a political storm with the main opposition Congress siding with him and raising the issues which it had been raising in the recent past.

"Ladies & Gentlemen, this is your copilot & FM speaking. Plz fasten your seat belts & take brace position.The wings have fallen off our plane," Rahul Gandhi tweeted. Meanwhile, former finance minister P Chidambaram said on Twitter: "Yashwant Sinha speaks Truth to Power. Will Power now admit the Truth that economy is sinking?"

File photo of Yashwant Sinha and Jayant Sinha. AFP

File photo of Yashwant Sinha and Jayant Sinha. AFP

By evening the government was forced to defend. Here's what various ministers said:

The government has insisted that the Indian economy is the fastest growing in the world and some "uncertainty" is bound to occur when "transformative" measures like demonetisation and the GST are taken.

Home minister Rajnath Singh said the country's credibility has been established in the international arena under the Modi government.

"The whole world admits that India is the fastest growing economy in the world. No one should forget this fact. In the matter of economy, in the international arena, India's credibility has been established," he told reporters while making a reference to Sinha's criticism.

Railway minister Piyush Goyal said the government would not flinch due to some criticism and that it would "stay the course" as it works to transform the economy. Goyal, who has often articulated the party's view on economy, said Sinha is entitled to his opinion.

"There is bound to be some uncertainty when some transformative changes are made. It (economy) may take some amount of time to absorb these changes but this will pass. Challenges come but we will stay the course. The government is steadfast in its resolve to end black money and corruption. It won't flinch due to some criticism," he said.

He also said Modi has given the "cleanest government" and had attacked black money and corruption like no one else has done.

Writing in The Times of India, Jayant Sinha, Yashwant Sinha's son and Union Minister of State for Civil Aviation, has said that the structural reforms unleashed by the Modi government since 2014 constitute the third generation of reforms.

According to him, the first generation is the one introduced in 1991 by then finance minister Manmohan Singh and the second generation was by the National Democratic Alliance during the 1999-2004.

"GST, demonetisation and digital payments are game-changing efforts to formalise India's economy," he has said in the article.

After the GDP declined to 5.7 percent in April-June, the government has come under fire from various quarters for two measures, namely demonetisation and hasty implementation of goods and services tax.

Both the measures undertaken without the required preparation have been blamed for creating a crisis in an already slowing economy. The demonetisation of Rs 500 and Rs 1,000 notes sucked out 86 percent of the currency in circulation and hit the cash-intensive informal sector hard. GST, meanwhile, was implemented even as the small and medium scale industries were not ready for the rollout which has resulted in utter chaos.

However, the government has been defending both the measures saying these are good for the economy in the long term though there will be short term pain.

Jayant Sinha has reiterated this view point in the ToI article. "In the long term, formalisation will mean (a) tax collections go up and more resources are available to the state; (b) friction in the economy is reduced and GDP goes up; and (c) citizens are able to establish credit more effectively as transaction records are digitised," he argues.

He has also listed out other policy initiatives taken by the government, including the Bankruptcy Code aimed at resolution of bank NPAs, push for infrastructure like road building and rural electrification and boost for startups.

The fundamental changes put in place by the Modi government will make the economy open, transparent, competitive and innovation-driven, he added.

With the structural shift, all citizens will have basic safety net and guarantee of basic requirements such as food, electricity, some employment, housing, a bank account etc.

"We are creating a robust new economy that will power long-term growth and job creation for `New India'," he said further.

(With inputs from PTI)


Updated Date: Sep 28, 2017 12:20 PM

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