As the Rajya Sabha resumed its Budget 2017-18 discussion after a month-long gap on Thursday, Mr Jairam Ramesh of the Congress said both growth and investment sentiments were subdued, and demonetisation had proved to be “a singularly disastrous economic move”.

Leading the Opposition attack during the second phase of the Budget session, Mr Ramesh said judging from the three indicators ~ railway freight, bank credit and electricity consumption ~ the economy’s performance was flat. For the first time in 14 years, the gross fixed capital formation had fallen. While growth was subdued, the investment rate had fallen from 34 per cent to 29 per cent, and was certainly not buoyant for growth.

Only time could tell, he said, if the UP poll results or the Goods and Services Tax law could help. Mr Ramesh said demonetisation had been a psychological shock and there was “spurious and dubious economic logic” behind it. He said on 8 November when demonetisation was announced, Rs 15.44 lakh currency was withdrawn, and out of this, the
Government’s “expectation” was Rs 4 lakh crore was black money, which would not return.

Till today, he said the Finance Minister had not disclosed how much money had returned to the government. Touching on the government’s claim that it had acted promptly on the issue of black money, Mr Ramesh recalled there were Supreme Court orders and the UPA and the current NDA Government had only taken follow-up action.

The UPA Government had asserted that locating black money was an Executive job when the Supreme Court ordered on 4 July 2011, that an SIT be formed. A multi-task force was constituted in May 2012 and the then Finance Minister Pranab Mukherjee published a White Paper on black money. Comparing the performance of the UPA and NDA Governments in unearthing black money, Mr Ramesh said NDA had claimed it had unearthed 1.25 lakh crore before demonetisation. This was certainly less than Rs 1.31 lakh crores unearthed during UPA’s last two years of office, as revealed by the former Minister of State for Finance Jayant Sinha in a Parliamentary reply, he said.

Coming to Aadhaar, Mr Ramesh said it was only meant to detect fake identities benefiting from government schemes. There were Supreme Court orders that it could not be mandatory for LPG, kerosene, PDS and some other schemes for pension and EPF. Still the government made it mandatory for mid-day meals for 140 million school children and
withdrew the orders only after a furore. Mr Ramesh said the government had claimed credit for raising states’ share in the Central taxes from 32 to 42 per cent but the reality was the overall Central devolution to states had fallen as the funding pattern for many schemes had raised the states’ contribution. Many 75:25 formula schemes in favour
of the states were revised to 60:40 pattern, putting heavier burden on the states, Ramesh said.

Several other members including Mr Ajay Sancheti (BJP) and Mr D Raja (CPI) participated. Mr Sancheti said the farmers worried much less today because of the crop insurance scheme started by the government. Mr Raja said there was nothing to contain inflation or create new jobs in the Budget. Health and education allocation was reduced. Mr
Shantaram Naik (Congress) said RBI had lost its autonomy.