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‘Demonetisation, GST played big role in decline of economy’

IANS | New Delhi |

Stepping up his attack on the government’s management of the economy, senior BJP leader Yashwant Sinha on Thursday said the Finance Ministry failed to address the problem of non-performing assets (NPAs) and the opposition Congress cannot be blamed for the “mess” in the economy.

A day after creating a political storm through his critique published in the Indian Express that led to a debate in the country over the state of the economy, Sinha justified his criticism of the economy while talking to various television channels on Thursday.

“The first serious task of the government should have been to solve the NPAs issue, plaguing the banking sector and holding back the economy. Around 40 months have elapsed since the government took over and the bad loans crisis looks nowhere near resolution,” Sinha told a news channel.

He said the economy was in bad shape for a long time because the government failed to analyse the effects of demonetisation and gave another shock in the form of the Goods and Services Tax. “They (Demonetisation and GST) played a big role in the decline of the economy,” he said.

“I am not judging on the basis of one quarter. The economy is falling from the last six quarters. I hope the government will wake up and the economy will catch the pace,” he said.

He said the government had failed to do a detailed analysis of the effects that demonetisation and GST would have on the economy.

“They should have analysed the effect of the note ban on employment and the overall economy,” Sinha said adding that the effects of demonetisation hadn’t subsided when the economy had to bear the brunt of another shock in the form of GST.

While supporting the idea of cashless economy, Sinha, however, said the move to suddenly impose it via the note ban was flawed.

“Even developed countries use cash to the extent of 40 per cent of the economy. India is a developing country where the agricultural sector, a cash-intensive sector, employs a lot of people. If you suddenly force cashlessness, it is going to create havoc,” he said.

The former Finance Minister said that a falling economy does not create employment.

“The economy is not something that can be fixed overnight. No one has a magic wand. It took us four years to get the economy back on track,” he said.

Responding to government claims that it inherited the economy in a bad shape from the previous UPA regime, Sinha said the Congress cannot be blamed for the mess in the economy as the Narendra Modi government has completed more than three years in power.

“There was a constant downfall in the economy, but I did not speak. We cannot blame the previous government any more because we have been in power for 40 months and got full opportunity to correct things,” he said.

“I was a supporter of GST. The government was in a hurry to implement it from July. Now, GSTN, which is the backbone, is failing,” he said.

On being asked about defence of the government by Home Minister Rajnath Singh and Railway Minister Piyush Goyal, Sinha said: “Rajnath Singh and Piyush Goyal seem to know the economy better than me.”

Asked about his son and union minister Jayant Sinha’s rebuttal of his claims in an article, Yashwant Sinha said: “If he (Jayant) was competent to answer my criticism, then why was he shifted from the Finance Ministry.”

To a question why he was not airing his views in party fora, Sinha said there was no platform available within the party. “In fact, I had asked for an appointment with the PM a year ago… still he has not given me time….”