Opposition parties on Tuesday pilloried the government over the state of the economy, saying its ‘reckless policies’ have created a massive disaster, despondency and uncertainty in the country and that United Progressive Alliance's exit from power is the only remedy to the situation.
Citing rising prices, slowdown in growth and depreciation of rupee among the problems facing the economy, the opposition members said in the Lok Sabha that they feared the repeat of the 1991 crisis when the country had to mortgage gold as it failed to meet short-term debt obligations.
Taking a dig at Prime Minister Manmohan Singh and Finance Minister P Chidambaram, the opposition members said they have been assuring the country that all is well and prices will be controlled but the reality is otherwise.
Participating in a debate on the economic situation in the country, Bharatiya Janata Party leader Yashwant Sinha said, "The government has lost control over the economy. So it is better that it goes."
Suggesting that the government was deliberately ‘playing with the economy’ since the last five years, he said, ‘the result is that the whole nation is suffering.’ Contending that the country had never seen such a ‘corrupt and incompetent’ government, he said, "we don't want this government anymore.
“Let us go to the people now. If you have courage, let us go to the people. There is only one solution (to the economic problems), go. Let people decide."
At the same time, the former Finance Minister said the Congress-led coalition will not give up power as it uses government ‘to make thousands of crores’.
Referring to volatility in the currency, Sinha said the government has failed to control it. "Market is disturbed and whatever is happening, it is not good for the country."
Initiating the debate, Communist Party of India leader Gurudas Dasgupta said, "the country is facing a massive disaster and economic tsunami because of reckless policies of the government."
He said the government should take responsibility for the state of "despondency, fear and uncertainty."
Shailender Kumar of SP, which supports the government from outside, said the country has been facing economic crisis since UPA-I and that he feared the repeat of 1991 situation.
"The Prime Minister keeps assuring people that they (government) will control price rise but there is no control," he said.
Targeting Chidambaram, he said he keeps assuring the country that there is no need to panic.
"But I pray to the Almighty that he should give them wisdom so that the economy is taken care of."
He also took a dig at Chidambaram, saying he is ‘wise’ and aspiring to be the Prime Minister.
On the longevity of the government, the Samajwadi Party leader said people say elections would be held in November or December butthe ruling coalition insists these will be held on schedule in May next year.
"We wish that they (government) get wisdom and all goes well. We will continue to support them," he said.
Alleging that the country has been made ‘insolvent’, Dasgupta said, "A non-performing government has generated a dangerous crisis which is almost an economic disaster, thanks to their incapacity and inability."
Suggesting that the government was looking at the US to help address the economic problems here, the Communist Party of India leader said, "Crisis is within India, not in America. Government has to evolve a policy to face the challenge. . .it has failed."Dasgupta attacked the government for "failing to stem the financial rot" and taking the country to a "crisis situation" witnessed in 1991.
Terming the situation as "distressing, alarming and chaotic", he said, "the crisis did not dawn on India yesterday. The decline in all economic and financial parameters has now burst into a crisis. . .A non-performing government has generated a crisis which has now become a disaster."
Referring to the Food Security Bill passed by the House on Monday, he said, "This bill itself indirectly makes the government admit that those hungry people who cannot buy food have to be provided with food at subsidised rates."
Observing that the livelihood of millions of people have been affected and crores of jobs disappearing, he said farmers were also in ‘grave distress’ as the agriculture sector's growth had declined.
While industrial production index growth rate had fallen from 1.1 per cent in 2012-13 to minus 2.2 per cent in June this year, the rate of growth of manufacturing sector declined from 2.6 per cent in May 2012 to minus 2.2 this June.
The growth of the service sector was the lowest in 11 years at 6.6 per cent, Dasgupta said.
He also said the rupee had devalued by 16 per cent, while the fiscal deficit stood at five per cent of the gross domestic product and forex reserves declined to $275 billion, which was ‘sufficient to meet the needs of three weeks only.’
The current account deficit had also risen.
Accusing the government of making the Indian economy ‘subservient to the American economy’, the Communist Party of India leader said when the US was in a crisis, the government said, ‘our financial situation was bad because of it. Now when US has emerged out of the crisis, government is saying American prosperity is hurting India.’
He lambasted the government for failing to stimulate savings, promoting job opportunities or turning around the economy by spending more on infrastructure and other projects.
"But when there is need to spend more, there is a contraction in government spending." Taking on the government for ‘excessive dependence’ on foreign investment, Dasgupta said, "Nowhere in the world has foreign money developed an economy.
“Japan was not developed by the US and neither was China developed by Brazil." According to Sinha, Prime Minister and the Finance Minister ‘are all aware of what the results (of their steps) will be. Despite that, the (government) is taking the same steps’.
He also emphasised that it was wrong to say Opposition was not co-operating with the government in Parliament.
Noting that fall in rupee is because of the "state of affairs", Sinha said even if the value goes up to 100 against the US dollar, then also the Finance Minister would say things are okay.
In 2008, there was the big crisis in the United States and it also had an impact on our country.
As a way out, the government's efforts over the years resulted in higher fiscal and revenue deficits.
"At that time also, we had said that carry out investment expenditure but the government increased consumer expenditure.
Then, the 2009 elections were on your mind," Sinha said.
The seed of the current crisis was sown in the last five years (starting 2008-09). "We are seeing the results of the last five years. . . Don't ask us for remedies," the former Finance Minister said.
There is no "quick fix" for the economic problems, neither with me or with him (Finance Minister), he said.
"There is paralysis in decision making and trust deficit," Sinha said.
Lashing out at moves to bring down gold purchases in the country to contain CAD, Sinha said the steps have resulted in the collapse of jewellery trade and crores of people are rendered unemployed.
"Out of the CAD of $90 billion, about $18-20 billion is due to coal import. "Gold is made the culprit (for widening CAD). . . what policy is this?," he said.
Bhakta Charan Das (Cong) said government is committed to inclusive growth and added that there is no need to be unduly worried over depreciation of rupee.