Band aid not going to heal deep wound: Cong on govt’s measures to revive economy

The Congress on Friday said the government has "confessed" that the Indian economy is under stress and questioned the "silence" of Prime Minister Narendra Modi.

He termed the measures announced by Finance Minister Nirmala Sitharaman on Friday to boost the economy as “band aid on a very deep and critical wound”.

“The today’s press briefing by the Finance Minister was less of a press briefing and more of a roll back of the grandiloquent rhetoric she had put out during her Budget speech last month,” Tewari said.

“A structural problem bedevils the fundamentals of Indian economy because of lag effect of demonitisation and GST coupled with the spectre of terror unleashed on even honest businesspersons juxtaposed with lack of understanding of economic issues by successive Finance Ministers of NDA/BJP,” he said.

“The BJP-led governments’ finance ministers have a very limited understanding of the core issues of India’s economy. What has been announced today is a band aid on a very deep and critical wound. Therefore, this roll back of earlier decisions is not going to help revive the Indian economy because it has slipped into a structural morass,” he Tewari added.

The former Union minister said that Niti Ayog vice chairperson Rajiv Kumar deserves to be congratulated for "admitting" that the current stress in the financial sector is "unprecedented"

This "confession", he said, requires a slight amendment as "it is not just the financial sector, (rather) it is the Indian economy that is under stress. The current situation in the Indian economy is unprecedented, something of the sort has not been seen in the past 70 years."

This "confession", he said, requires a slight amendment as "it is not just the financial sector, (rather) it is the Indian economy that is under stress. The current situation in the Indian economy is unprecedented, something of the sort has not been seen in the past 70 years."

"When you have the Indian economy enter its choppiest phase perhaps, the silence of the Prime Minister and the Finance Minister are deafening. All you see is deflection, politics of vendetta, undeclared emergency across the country," he told reporters here.

Niti Aayog Vice Chairman Rajiv Kumar said on Thursday the government was considering a number of measures which will be taken at an appropriate time to deal with financial stress and unleash animal spirit in the economy.

Tewari said on Friday over 3 crore people are currently facing a threat of becoming unemployed.

"Every sector of economy is under grave stress. The textile industry has been putting out advertisements on a daily basis for past one week, explaining that this is perhaps the worst period which the textile industry has seen in the past seven decades," the Congress leader said.

The primary reason for this is that the government does not have a clue as to how it will handle this crisis which is intensifying on a daily basis, Tewari said.

"Much that the BJP-NDA government would like us to believe that this is because of Pandit Jawaharlal Nehru, unfortunately that is not the case. This is the making of the NDA-BJP government in the past five years," he said.

He said there is a "shadow-banking crisis" because of insecurities, and private consumption which constitutes 60 pc of the GDP is at historic low.

The crisis in the automobile sector is very well documented as 3,50,000 people stand retrenched in the auto sector and Maruti Suzuki alone has cut its production by 25% for the sixth consecutive month in a row, he noted.

"The growth of the Indian economy has slowed down to 5.7 pc, the worst performance in the past 5 years and this is 5.7 pc with 2011-2012 as the base year," he said.

Later in a tweet, Tewari said, "A structural problem bedevils the fundamentals of Indian economy because of lag effect of Demonitisation/GST coupled with spectre of terror unleashed on even honest businesspersons juxtaposed with lack of understanding of economic issues by successive Finance Ministers of NDA/BJP."

(With inputs from PTI)