Demonetisation origin of ongoing crisis in Indian economy: Sonia Gandhi


New Delhi: Congress president Sonia Gandhi on Thursday attacked Prime Minister Narendra Modi on various economic issues, including over the proposed privatisation of the PSUs.

In an op-ed in The Hindu, Mrs Gandhi said demonetisation in 2016 was the origin of the ongoing crisis in the Indian economy. She referred to former Prime Minister Manmohan Singh’s “prescient words in Parliament” that that demonetisation would lead to a 2% drop in the GDP.

“The origin of the ongoing crisis in the Indian economy was the fateful night of November 8, 2016. Dr. Manmohan Singh’s prescient words in Parliament – that demonetisation would lead to a 2% drop in the GDP – were not heeded by Prime Minister Narendra Modi,” she wrote in a piece titled “The distress sale of national assets is unwise”.

“On the contrary, a badly designed and hastily implemented flawed Goods and Services Tax (GST) followed, further devastating vast numbers of medium and small enterprises, as well as the vast informal sector of the economy. Together, these twin disasters robbed millions of their livelihoods and plunged the Indian economy into a prolonged slump that predates the COVID-19 pandemic,” Gandhi further wrote.

While Prime Minister Modi did not heed to the advise of Mr Singh, the Congress chief writes, a “badly designed and hastily implemented flawed Goods and ServicesTax (GST) followed.”

She also attacked the BJP government for high fuel taxes and on “distress sale” of PSUs as it fails to meet the disinvestment target.

The Raebareli MP added that the privatisation of government assets will also have an impact on social justice as PSUs have ensured high-quality jobs to Dalits, Adivasis and OBCs.

She also raised the issue of non-performing assets in banks, asserting that these have put banks in danger. Concluding her article, she suggested a case-to-case strategy for PSUs and PSBs.

Earlier last month, Modi had said that the government has no business to be in business and his administration is committed to privatising all PSUs barring the bare minimum in four strategic sectors.

Fiscal support to sick PSUs puts burden on the economy and public sector units should not be run just because of legacy, the Prime Minister said, adding many PSUs are loss-making and supported by taxpayers’ money.

The government has many underutilised and untilised assets and 100 assets would be monetised to garner Rs 2.5 lakh crore, he said.


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