Economy in downward spiral, hard landing inevitable: BJP leader Yashwant Sinha

New Delhi: Senior BJP leader Yashwant Sinha in hard-hitting remarks has lashed out at "superman" Finance Minister Arun Jaitley for making a "mess" of the Indian economy which is headed for a "hard landing" as sector after sector is slipping into distress.

In an editorial page article in The Indian Express, Sinha, who was Finance Minister in the Atal Bihari Vajpayee government, said Prime Minister Narendra Modi "claims he has seen poverty from close quarters (and) his finance minister is working over-time to make sure that all Indians also see it from equally close quarters".

Sinha said Jaitley had been luckier than his predecessors to hold the Ministry at a time when lakhs of crores of rupees were at his disposal following the depressed global crude oil prices.

But he wasted the oil bonanza which "was waiting to be used imaginatively".

"The legacy problems like stalled projects and bank NPAs were no doubt there and should have been managed better... But the legacy problems have not only been allowed to persist, they have become worse."

Illustrating the picture of the Indian economy today, Sinha said private investment has shrunk "as never before in two decades" while industrial production has all but collapsed.

"Agriculture is in distress, construction industry, a big employer of the work force, is in the doldrums, the rest of the service sector is also in the slow lane, exports have dwindled, sector after sector of the economy is in distress."

Continuing his tirade against the government's demonetisation decision, Sinha said spiking large currency notes "has proved to be an unmitigated economic disaster" which coupled with "a badly conceived and poorly implemented GST" has played havoc with businesses and sunk many of them.

"Countless millions have lost their jobs with hardly any new opportunities coming the way of the new entrants to the labour market. For quarter after quarter, the growth rate of the economy has been declining until it reached the low of 5.7 per cent in the first quarter of the current fiscal."

He said if the government had not changed the methodology for calculation of the GDP in 2015, the growth rate of 5.7 per cent would have actually been 3.7 per cent or less -- according to the old method of calculation.

He came down heavily on the government's view that the slowdown was for technical reasons and cited the SBI, the largest public sector bank of the country, as stating "with unusual frankness that the slowdown is not transient or 'technical', it is here to stay".

He said it was not difficult to anticipate the reasons for the slowdown and counter measures taken to deal with them.

"But that called for devoting time to the task, serious application of mind, understanding of the issues and then working out a game plan to tackle them."

He noted that Jaitley, who holds the department of disinvestment, and also held the Ministries of Defence (which was given to Nirmala Sitharaman in the last cabinet rejig) and Corporate Affairs, was carrying the heavy burden of so many extra responsibilities and it was "perhaps too much to expect from" him.

"I have handled the Ministry of Finance and know how much hard work there is in that ministry alone. Finance Ministry, in the best of times, calls for the undivided attention of its boss if the job has to be properly done. In challenging times it becomes more than a 24/7 job. Naturally, even a superman like Jaitley could not do justice to the task."

Sinha said he was speaking about the mess after realizing that "I shall be failing in my national duty if I did not speak up even now".

"I am also convinced that (it) reflects the sentiments of a large number of people in the BJP and elsewhere who are not speaking up out of fear."

He said the SME sector was suffering from an "unprecedented existential crisis".

"The input tax credit demand under the GST is a whopping Rs 65,000 crore against a collection of Rs 95,000 crore. The government has asked the income tax department to chase those who have made large claims.

"Cash flow problems have already arisen for many companies specially in the SME sector. But this is the style of functioning of the Finance Ministry now.

"We protested against raid raj when we were in opposition. Today it has become the order of the day."