Congress: No statistical jugglery can change the fact that Modi govt has crashed the economy

In a scathing attack on Modi govt, Prof Gourav Vallabh, National Media Panelist, AICC said  the Modi Government has created a new portfolio known as ‘Chief of Blog Writing’, and it seems that the Finance Minister, Arun Jaitley has quickly pounced on this exciting responsibility, whereby instead of looking after the workings of the Finance Ministry, he is busy writing lengthy, meaningless blogs!

Alleging that the government is indulging in ‘statistical jugglery’ to project a positive picture of the economy, the Congress leader said, no amount of spinning, statistical jugglery and weaving alibis can change the Fact that Modi Govt has crashed the economy.

But facts always cut the fog. Citing a few examples supported by facts, Prof Gaurav Vallabh elaborated upon how economy at present is in shambles:

1. It is good that GDP growth in first quarter of 2018-19 is 8.2%. But the hidden reason is the base effect, Q1 growth rate is based on the lowest base (5.6) in the last 8 quarters:

In the next few quarters, the base effect will not be so favourable. And when we reach Q3 and Q4, the rate of growth may decline and the annual growth rate may be more or less like last year's. It is important to note that last year 2017-18, Under Modi Govt the Economy recorded a 4 Year Low GDP growth at 6.7% and IMF has also lowered the Growth estimates.

1. The Real GDP which is increasing is GDP- Gas Diesel & Petrol. From today onwards, Prices of Non Subsidized LPG Cylinder in Delhi has been increased by ₹30.50, thus spoiling the budgets of the middle class people. For a non-subsidised LPG cylinder, one has to pay a whopping ₹ 1401.5!

Petrol has crossed ₹85 in several cities and Diesel has been touching ₹75 in many cities like Mumbai. The government is set to miss its Fiscal Deficit Target just like last year as it has already crossed 86.5% of full-year budget estimate for the four months ending July. The core sector growth has slowed down to 6.6% in July.

2. Rupee is in ICU. Modi Govt is at its last lap. All the loudmouth tall promises of Shri Narendra Modiji during the 2014 Lok Sabha elections have disappeared from the BJP’s narrative. What the Congress party could not achieve in 60 years, Shri Modiji and his deliberately flawed economic policies have achieved in just 60 months! Rupee has lost almost 10% of its value in 2018 itself. Rupee has become Asia’s weakest currency under Modi Govt!

3. Modi Govt and its Finance Minister, Arun Jaitley must know that Demonetisation was the biggest hoax on the people of India. No matter how many goalposts Modi Govt changes, that reality shall not change. FM Jaitley has now invented a unique argument of demonetization increasing the direct tax base. However, that argument also falls flat on its knees:-

a. As per our FM's blog the last 2 years has seen the growth of around 16-17% in direct tax collected in FY 2016-17 and 2017-18 and reached net value of around 9 lakh Cr. During Congress UPA II tenure growth rates of direct taxes collected for FY 2010-11, 2011-12, 2012-13, 2013-14 are 17.97%, 10.76%, 13.16%, and 14.24% respectively.

During UPA I tenure, in 2006-07 the highest growth rate in the last two decades of 39.92% in collection of direct taxes was recorded.

Moreover, the direct taxes (Rs.) grew by 151% over UPA I tenure and by 68% during UPA II tenure, but has only grown by 43% so far during the Modi Government's tenure.

Here is the year-wise list of direct tax collection in crores:

c. Immediately after BJP came to power in 2014-15 this direct tax growth rate reduced to 8.96% and further nosedived to 6.63% in next year and year before Demonetisation; it again rose to 14.54% but this effect is due to the low base effect owing to the slow growth during BJP’s tenure. Thus it is clear that the Demonetisation had no real effect on the direct tax growth rate.

d. Congress - UPA did not need to enact Demonetisation to achieve direct tax growth rate of 39.92% in 2006-07 but it achieved it through sound policy making and balanced management of the economy. So it seems laughable when Modi Govt pat themselves on back over 18% growth in direct taxes collected and conclude that it is one of the results of Demonetisation!

5. Had BJP matched the UPA II growth rates in direct tax collections for last four years, direct tax collection would have crossed more than 10.5 lakh crore. But they failed at it miserably and still take pride in achieving net collection of around 9.95 lakh Cr.

6. FM Jaitley’s claim that “the number of New Returns filed post Demonetisation increased in the past two years by 85.51 Lakhs and 1.07 crores” is ironically debunked by the Economic Survey (2016-17) of his own Govt. Economic survey finds that the overall marginal impact of demonetization was just 5.4 Lakh accounts that amounts to just 1% of the tax base.