Former finance minister P Chidambaram surprised the media with his undiminished cheek a couple of days ago when he used the few seconds he got in media glare to target the Narendra Modi government over the economic slowdown while remaining in CBI custody all along. As he stepped out of a special CBI courthouse, a reporter asked him to say something about his custody to which Chidambaram replied while raising his hands to show his five fingers, "Five percent. Do you know what is five percent?"
The gesture was a jeer at the recent abysmal GDP numbers as Indian economic growth slumped for the fifth straight quarter amid the Centre squarely refusing to acknowledge that the country is under any kind of economic slowdown. Neither wants the blame for the slump, both seek to hang the blame on the other's door. Meanwhile, the ensuing back-and-forth between the government and the Opposition over the state of the economy was vaguely reminiscent of the UPA era when the Congress and the BJP had their roles reversed.
The BJP, back in the day, used to attack Congress over unemployment, a depreciating currency, inflation and UPA's core financial policies such as throwing open the domestic retail market for Foreign Direct Investment, or introducing the revolutionary single window tax regime, the Goods and Services Tax.
Today, it is the Congress that accuses the BJP of the same sins, in addition to berating the latter's version of GST and policy reforms such as demonetisation and transferring of RBI surplus to the government. The comparative performance of both parties on actual growth figures remains debatable, some of their key policy reforms lack precedents and may not even be comparable, but their actions as the principal Opposition party are still eerily similar.
Goods and Services Tax
One of BJP's much-touted economic reforms was the overhaul of the indirect taxation system with the introduction of Goods and Services Tax. But, there was a time when the party opposed it tooth and nail, with Modi himself describing it as “retrograde in nature and completely against the tenets of fiscal federalism."
On 20 February, 2011, Yashwant Sinha, then one of the prominent economists in the BJP had bluntly said: "They are doing a wrong thing." Gujarat finance minister under the Modi government, Saurabh Patel said that GDP fundamentally alters powers of the states to levy and collect indirect taxes. "If the Union government through an ordinance enacts the GST regime, Gujarat will have to bear Rs 14,000 crore loss per annum due to the destination-based taxation principle," he said.
And yet, the party rehashed the original idea and launched it with much aplomb in 2017, with Prime Minister Modi himself admitting in Parliament that he did have doubts about GST as a state's chief minister.
"I had many doubts. I had discussed it with Pranab Mukherjee many times," Modi said in his speech. "But as prime minister, having the experience of a chief minister, I could easily address the concerns on GST," Modi said in Lok Sabha on 9 August 2016.
However, it was the Atal Behari Vajpayee-led NDA government which had initiated the groundwork for the GST by setting up a committee, headed by then West Bengal finance minister Asim Dasgupta, in 2000 to design a GST model.
Meanwhile, the Congress party had taken up the role of Opposition, and it even went to polls in several states on the back of BJP's 'failure' to give a robust and simplified taxation system. In fact, Rahul Gandhi famously dubbed GST as Gabbar Singh Tax ahead of elections in five states in 2018, including Gujarat. But it is Chidambaram, who has constantly attacked the ruling party with facts, figures and reasoned attacks both inside and outside Parliament on matters of economy, growth and unemployment. While the overall Congress narrative was largely a criticism of 'complexity' of the system, it was Chidambaram who also sought to remind BJP of its previous stand.
" If GST is a 'victory of integrity' and ' celebration of honesty', why did the BJP oppose it and stall it for five years? Why do the PM, FM and acting FM refuse to speak on the numerous flaws in the implementation of GST?" he asked.
"Until yesterday a single standard rate of GST was a stupid idea. Since yesterday, it is the declared goal of the government! Until yesterday capping GST at 18 percent was impracticable. Since yesterday, the Congress party's original demand of an 18 percent cap is the declared goal of the government! Until yesterday, the Chief Economic Adviser's RNR report to fix the standard rate at 15 percent was in the dustbin. Yesterday it was retrieved and placed on the FM's table and was promptly accepted!" the former finance minister said.
Party leader Veerappa Moily even claimed that the delay in the rollout of GST caused by BJP's opposition cost the country around Rs 1.5 lakh crore annually and put the total loss at Rs 12 lakh crore.
State of Indian Rupee
From a depreciating currency to overall GDP growth, the BJP had come down hard upon the previous UPA government in the course of the election to promote the idea that would herald big-ticket reforms to overhaul the economy. Even till date, BJP leaders blame 'legacy slowdown' passed over from the UPA era for whatever ails the Indian economy while making mighty promises before the end of its current term in 2024.
When the rupee had fallen to a record low of 64.11 against dollar, just before the 2014 elections, Modi had come down heavily on the UPA regime blaming it for only being concerned with 'saving its chair'. BJP spokesperson Prakash Javadekar had called the frequent depreciation in value of rupee "the glaring failure of the Economist-Prime Minister in managing the Indian economy". At that time, Chidambaram had defended the government and urged people that there was no need to panic, "Why should there be such a reaction in the world market. Obviously that money which is being pulled out from all emerging markets will ultimately have to find a place."
However, with rupee trailing at around 70-74, with the historical '70 mark' breached long back, this appears to be the talk of a bygone era. But this time around, the BJP which was once in the offensive even when rupee trailed at 58-59 against dollar, had largely remained mum. The then economic affairs secretary Subhash Chandra Garg did justify the weakening rupee when it first crossed 70-mark in August 2018, said the rupee was still performing better than some other currencies, adding that the country had sufficient foreign exchange reserves to deal with volatility.
Chidambaram again was quick to lampoon the government. "Looking forward to BJP's achhe din when the US dollar will trade at One dollar = Rs 40!" the former finance minister had said.
While rising inflation, cost of diesel and petrol, and economic slump were some of key attacks in BJP's arsenal during its Opposition days, the party seems to be in Congress' line of attack on similar issues now that their roles are reversed.
Chidambaram has steadily and consistently been the government's most vocal critic on the matters of economy since Congress had to move to the Opposition benches. From accusing former finance minister Arun Jaitley of perfecting the art of "concealing" data and projecting "doctored" information, to calling Nirmala Sitharaman's maiden budget weak and insipid, Chidambaram has been returning the favour to the BJP full throttle.
"With each passing day, as Modi indulges in vile rhetoric, the Finance Minister blogs poor attempts at rationalising that language. Between the rhetoric and the blogging, this government has forgotten the economy. The next government has a huge task of reviving the economy. Thankfully, the Congress party is ready to steer the Indian economy out of the Modi-Jaitley slump," Chidambaram had said on May 2019, just before the nation went to elections. Commenting on NDA 1 government, he had said the economy has gone to "rack and ruin" and the finance ministry's report for March 2019 lays bare the "false propaganda" of the BJP government.
Chidambaram also dubbed the prime minister as being "the 'Naukri Vinash' PM" claiming that in 2018 India lost over 1.1 crore jobs and said Modi is the first premier whose legacy will be of a job destroying PM" built on the two "Tughlaqi farmans" of demonetisation and "Gabbar Singh Tax", referring to Goods and Services Tax (GST).
"The leaked NSSO survey reports that the unemployment rate reached a 45-year high of 6.1 percent in 2017 (nearly tripled from 2012), with the youth being the worst sufferers of the government's surgical strikes on jobs and the economy," he said.
The former finance minister had also been drawing attention to the government's attempts to acquire RBI's surplus funds — something that has grabbed public attention recently — since November 2018.
Chidambaram said, "After having failed to get money out of demonetisation, the BJP-led Centre is now eying the reserves of the RBI which is why they have started this problem with the RBI after four-and-a-half years of being in power."
"Demonetisation was the beginning of the problem. After 'Notebandi', the Finance Minister (Arun Jaitley) said that out of the 15 lakh 44 thousand crore rupees, something like three to four lakh crore will not come back to the Reserve Bank of India and that will be transferred to the Government of India. The Attorney General of India, Mukul Rohatgi told the Supreme Court - and I was present there - that their calculation shows that the government will get a windfall of three to four lakh crore rupees. They got zero. 99.3 percent of the currency notes came back to the RBI," the former finance minister told the media.
"The government thought they could make a profit, but they got nothing. Today, they are desperate for money. Why? GST collections are short of the target, net direct tax collection is short of the target, the fiscal deficit of 3.3 will not be met. Therefore, they are desperate for money to meet the fiscal deficit target. They also want money because this is the election year and they have always spent. They don't have the money," Chidambaram had claimed.
Updated Date: Sep 05, 2019 15:59:10 IST