Former Union minister Yashwant Sinha on Friday termed Finance Minister Nirmala Sitharaman's remarks on the state of economy as "disappointing in the extreme" and said the main cause of the current crisis is "death of demand". He said that even now, the government is largely in denial and one cannot solve a problem if "you are in denial of its existence". Replying to a short-duration discussion on the state of the economy in the Rajya Sabha on Wednesday, Sitharaman has launched a spirited defence of her handling of the economy, comparing macroeconomic indicators with past Congress rules and said the growth may have slowed down but the economy will never slip into recession.
"We have heard what the finance minister said in the Rajya Sabha...and it was disappointing in the extreme," he said at the National Economy Conclave.
Sinha said the root cause of the current economic crisis is "death of demand" in the country. He alleged that the government ignored the agriculture distress in the country.
"The current economic crisis that we are seeing today did not come suddenly. It is not a train accident that happened suddenly. It was building up over the time," he said.
Sinha also raised questions over the data for calculating gross domestic product (GDP) numbers. Further, he added that companies after companies are facing bankruptcy and the government has stated that it would have to close Air India if it would not find buyer. This would lead to unemployment of thousands of people and those "employees will be left to beg," he said. He said the government's performance in the past five years was dismal.
"What is the state of government finances. They are in a bigger mess. This year, the situation is going to be much worse despite the government robbing the RBI (Reserve Bank of India)," he said adding that the government is starved of funds and this year's fiscal deficit will be much worse.
He alleged that the government is misleading people and the economic crisis that the country is witnessing is "entirely home grown". A section of economists also said the economic crisis is there in the country and the government is not doing anything. Economist Arun Kumar said the government is taking into consideration the data of the organised sector only to calculate the GDP rate and not the data of the unorganised sector.
"There is a decline in the growth rate and recession in the economy," Kumar said adding that every sector is down including core sector, Index of Industrial Production, fast-moving consumer goods and automobiles.
He also said that as many as seven controversies were created around GDP calculation and these controversies will continue. He suggested that the GST needs a major reform because it has structural issues. Sharing similar views, Jayati Ghosh from Jawaharlal Nehru University said that the economy is in serious crisis and the government is trying to suppress the data. GST is "terrible" tax policy and it should be "killed" as it is not working, she said.
Speaking at the event, T K S Elangovan of DMK party said foreign investors will not come as the country is facing economic problem. "Jobs are going down. Educated people are not getting jobs," he said. Former Rajya Sabha MP D Raja also alleged that there is an economic and job crisis in the country and it is "haunting all of us".