PM says economy is fine, critics are worrisome
From Prime Minister Manmohan Singh's recent speech at a trade forum, it would appear that the problem is not so much the failing economy as it is those who carp about it. The critics (ranging from the Opposition to unfriendly commentators to even sections of the industry) have, the Prime Minister has disapprovingly noted, latched on to ‘one bad year' to comprehensively run down the Congress-led UPA's ‘good' management of the economy over the last nine years. Mr Singh is being too soft on his failures and that of his regime, because neither is the bad patch limited to one year nor has the Government's performance been more than average in the years he and his coalition have been in power. Current account deficit has shot up from 2.8 per cent of the Gross Domestic Product in financial year 2010 to an unmanageable 4.8 per cent in financial year 2013; the Index of Industrial Production has plunged from 10.5 per cent to 3.5 per cent during the same period; the Wholesale Price Index has shot skyward from a mere 1.6 per cent to a troubling 7.6 per cent in the same corresponding year. As if these woes were insufficient, the country's foreign exchange reserves have gone down and the rupee has hit all-time lows against the dollar. Mr Singh does not deny these realities — he couldn't if he wanted to — but he believes his detractors are looking at the dark side. Does the brighter side exist beyond the make-believe world which his spin doctors have createdIJ The Prime Minister now wants us to believe that the worst is behind us, but offers us no incentive to do so. He is promising more relaxations in foreign direct investment, and claiming that these will shore up the grim investment climate. We have heard that before and seen the pathetic results of such patchwork solutions.
He is also promising that his regime will stick to the fiscal deficit target (of 4.8 per cent of the GDP). Mr Singh had promised this and more before, and failed to honour them. Then, just as he is now doing to prepare the ground for potential failure, the Prime Minister blamed global trends for India's economic mess. When the global meltdown of 2008 had not hit India as badly as it did other countries, the Government credited its own ‘prudent fiscal policies' for the development. Now, when the economy has all but spun out of its control, the Prime Minister is pointing fingers at global trends. In his speech at the annual meeting of Assocham, Mr Singh blamed volatility in the foreign exchange market for the rupee's downfall, and the rupee's depreciation for the setback in neutralising under-recoveries by oil marketing companies. Eventually, the Prime Minister proudly says that the average growth rate in the UPA's regime since it took over in 2004 has been 8.2 per cent, as compared to less than six per cent during the NDA’s rule. If things have been so hunky-dory except for that ‘one bad year’, why is then the economy in a shambles todayIJ