Economic Situation ‘Bad’, 5% Growth Estimate ‘Imaginary’: Yashwant Sinha
Former Union Finance Minister Yashwant Sinha on Wednesday questioned estimation that the economy will grow at 5 percent in 2019-20, saying the figure is "imaginary" and raised doubt about Prime Minister Narendra Modi-government's capability of tackling economic issues.
Talking to reporters, Sinha also demurred PM Modi holding "pre-budget consultation", saying it is "unprecedented" and asked what the latter's Finance Minister is doing.
India's gross domestic product growth is seen dipping to an 11-year low of 5 percent in the current fiscal, mainly due to poor showing by manufacturing and construction sectors, government data showed on Tuesday.
"Even this 5 percent growth is imaginary. Because this does not include what has happened, the damage which was caused as a result of demonetisation and Goods and Services Tax on the MSME (micro, small and medium enterprises) and the informal sector," Sinha told reporters in Mumbai.
The former Union finance minister said several economists are suggesting that India is experiencing negative growth if the factors caused by demonetisation and GST are to be kept in mind.
The economic situation is "too bad", he added.
"You (reporter) talked about budget. The budget has lost all its meaning. The budget has lost its sanctity which was there at some point of time," he said while replying to a query.
"I have grave doubts about the capability of this government to tackle economic issues," the former Bharatiya Janata Party leader added.
Sinha said there is no magic wand to correct the course of economy and added there is a need for sustained effort to put things on track.
"But frankly, I don't expect anything much from the government either before or after," he said.
Sinha further said earlier budgets were worked out in the finance ministry and noted it was "unprecedented" for the prime minister to hold pre-budget consultations.
"But where it (the budget) is being made today I don't know. But they have the mouthpiece who will read out the budget in the Lok Sabha," he said.
Former Maharashtra Chief Minister and Congress leader Prithviraj Chavan, who accompanied Sinha, said the plunging economic numbers are a "matter of grave concern".
He said former Chief Economic Adviser Arvind Subramanian had last year talked about GDP growth rates being inflated by 2.5 percent.
"That is condition and it is not 5 percent, it is 2.5 percent," he said about the estimates.
Chavan accused the Modi government of not consulting experts during crisis situation and said the issues of Citizenship Amendment Act and National Register of Citizens are being raised to distract people's attention from economic woes.