SHRI Y.S. CHOWDARY (CONTD):Similarly, so many highways were planned, but unfortunately a lot of infrastructure projects and companies are in trouble mainly because of the inconsistent policies about the right of way, etc. So far as the banking sector is concerned, Indian banks are the backbone of the Indian economy, which are really in trouble today. As a matter of fact, in the last year’s Budget speech, I had mentioned that under the gamut of Corporate Debt Restructuring (CDR), a lot of companies were queuing up there. If the Government does not come out with any concrete policies, probably we would require a cell for restructuring the banks, which has already arisen today. Infrastructure is the most important issue, but in our country, we have always defocussed because of our lopsided policies. Infrastructure requires a long tenure and low-cost funding, which has not been looked into. Fundamentally, there is no equity. While we all agree that the Railway route is the most efficient route, we have hardly developed it. Post Independence, we have not even doubled our railway tracks. Sir, 70 per cent of our crude oil is imported and our entire forex is going for that. The current account deficit is mainly arising out of that. I do not want to go into other statistics. So far as the State of Andhra Pradesh is concerned, it is like adding fuel to the fire. Our UPA Government has taken a drastic decision, which has led to further problems. Not even a single sector, whether farmers or small and medium industries, is doing well. It has totally broken. The Government has broken, the industry has broken. People are losing jobs. I think the Government has failed in every front. Our CAD is increasing, GDP is going down, fiscal deficit is also increasing year after year, whereas, the corruption index is really going up. ...(Time bell)... Sir, please give me a minute. I am unable to understand what the Government is doing for the last one decade, whether UPA-I or UPA-II. The way they are working, I think, the Government has no moral right to continue. Thank you.
SHRI D. RAJA (TAMIL NADU): Mr. Vice-Chairman, Sir, we are discussing the state of the economy. The state of the economy is in a very bad shape. The economy is in a deep crisis. Every speaker has pointed it out. The Indian economy is slipping to less than 5 per cent growth rate. The problem of current account deficit, depreciation of Indian rupee, inflation and price rise, decline in industrial output, decline in manufacturing sector, decline in agricultural production are all major concerns in addition to the growing unemployment and the decline in purchasing power of our toiling people. But many speakers have given their good wishes for the revival of the economy. Even Shri Mani Shankar Aiyar spoke from the Congress Party. It is a different thing that he was not in his self. The reasons are very obvious. But he has appealed to Shri Ravi Shankar Prasad to join hands for the revival of the economy. It exposed one reality. Both, the Congress Party and BJP have no problem on economic policies or fiscal policies. This situation demands a serious introspection. The way the corporate houses are dictating terms to the Government or deciding and influencing the policies of the Government, I do not foresee any revival of our economy.
(Contd. by 3F/RG)
SHRI D. RAJA (contd.): This requires a paradigm shift, an alternative policy framework. The Congress (I) Party lacks such an alternative policy framework. In fact, Shri Mani Shankar Aiyar referred to 1990s , and he even referred to the Welfare State. I think, 1990s were the beginning of the Congress (I) Party moving forward from the Nehruvian model of economic development, from the Nehruvian principles of Welfare State. Now, slowly, the Indian Government is emerging as a neoliberal Government, not having any concern for the poor, not having any concern for the toiling people. Sir, this situation is very alarming and let us look at the reality as reality. It is of no use closing our eyes and blaming it on others as they are all on a denial mode. It is a reality. The current account deficit is used as an excuse by the Finance Minister or by the Government as a whole for opening up our economy for FDI in various sectors. Already the retail trade has been opened up. Now the Government has proposed to increase the FDI ceiling in insurance sector from 26 per cent to 49 per cent, and it has proposed to increase the FDI in defence production and in all public sector banks. Sir, these are all very disastrous moves in the given situation as the CPI and other Leftist parties are opposed to these kinds of proposals that the Government has been making. This is not the way to revive the economy. Look at the FDI. Even my good friend, Shri N.K. Singh, was referring to the FDI. In fact, the FDI declined from 15.7 billion dollars in 2011-12 to 12.8 billion dollars in 2012-13. But the Government has been hiding behind its own inability to control imports of luxury items such as gold and jewelleries. Now the Government has taken some steps to control imports of gold and jewelleries. The fact is that the Government has been giving tax sops to the gold and jewellery sector to the extent of more than Rs.50,000 crores. And this situation is likely to worsen with the depreciation of rupee. Sir, when I come to depreciation of rupee, -- if my facts are wrong, the Finance Minister has the right to correct me – the rupee value is going down. In 1947, when we got independence, the rupee value was equal to the dollar value.
(MR. DEPUTY CHAIRMAN in the Chair.)
One rupee was equal to one dollar. That was the situation in 1947. Now, one dollar is equal to Rs.61. When our economy is growing, as per the Government statement, at five per cent, and the economy of the U.S. is growing at two per cent, then, why is our rupee falling in value? What is the secret? The American dollar value has not fallen, but the Indian rupee value has been falling. What is the logic and how is the Government going to explain this?
Sir, the other issue is that the Government has not been talking about the black money. In the earlier Sessions of Parliament, there used to be uproar in the House on the issue of black money which had been stashed to foreign countries. Now nobody knows what the Government is doing on black money.
On the question of non-performing assets of banks, it is a very serious issue, and the Government is not saying anything about non-performing assets. Loans in banks are increasing. The official figure is 1,64,000 crores. This does not include loans restructured and shown as good loans. If you include both these, the total bad loans will be more than Rs.2,50,000 crores.
(Continued by SSS/3G)
SHRI D. RAJA (CONTD.): But Government still wants to loan to big corporate houses, big business Houses. Sir, when I talk about slow-down, the biggest failure of the Government has been ignoring the structural weakness of the economy. Even though the country claims that we have adequate growth rate, the economy has failed to create jobs. In fact, in the last seven years between 2004-05 and 2011-12, only nine million jobs were created. This confirms the story of jobless growth. In addition, every year we have more than 12 million people joining the ranks of unemployed people in this country. Sir, what has also compounded the matters is the fact that most of the jobs that have been created are in unorganised sector and in low productivity sectors. This has also been accompanied by suppression workers’ rights in big companies such as Suzuki, which we witnessed. Sir, the Government continues to provide benefits to the corporate sector and corporate sector is given all kinds of exemptions, all kinds of tax exemptions. There is no additional tax on the corporate sector. How the revenue foregone has been increased,...
MR. DEPUTY CHAIRMAN:Your time is over. (Time-bell)
SHRI D. RAJA: ...my previous speakers have pointed out.
MR. DEPUTY CHAIRMAN: Your time is over.
SHRI D. RAJA: We are discussing the state of economy. If economy is in good health, we all can be in good health. The country can be in good health. Now if you don’t want to discuss, let us leave it to destiny, to fate. What is going to happen, let it happen to the Government.
MR. DEPUTY CHAIRMAN: You should practise economy.
SHRI D. RAJA: Sir, this is a serous subject. In fact, this date has been chosen for discussion on this subject.
MR. DEPUTY CHAIRMAN: So, try to practise economy here also.
SHRI D. RAJA: What I am trying to say is, the Government now will have to unleash some serious, major measures. Government will have to tax....
MR. DEPUTY CHAIRMAN: Please conclude.
SHRI D. RAJA: Sir, I am concluding. Government will have to tax the corporate sector, widen the tax-base. Government will have to restore subsidies. Government is cutting down the expenditure or spending on social sector, on health and education and Government should restore subsidies. Government should increase the public spending on poor people. Government should strengthen the manufacturing sector in order to create jobs and Government should stop disinvestment in public sector industries, public sector banks. They are the strength of our economy. Government should not weaken the public sector. Sir, I cannot have any hope that this Government is going to realise what their faults are, or whether they will review their neo-liberal economic policies. Unless a review is done, unless Government goes for mid-course correction, economy cannot be saved. If Government is not prepared, people will have to provide an answer by change of Government. Thank you.
SHRI PIYUSH GOYAL (MAHARASHTRA):Thank you, Mr. Deputy Chairman, Sir, for giving me this opportunity to participate in this very important debate. I am sure all sections of the House are very concerned and disturbed at the state of the economy. It is not a question of the Government or the Opposition. Today it is a question of the future of our very nation and it is with great deal of concern that I rise today to make a few observations. My very good friend, Shri
N. K. Singh, was very laudatory in his comments about the good effort that the hon. Finance Minister made to contain the fiscal deficit. I thought the first thing I will do is just highlight to the hon. Members what really the hon. Finance Minister did, more a sleight of hand than really doing something good for the nation. He finally landed up by reducing Rs. 60,000 crores in the receipts of his Government, which is something he had kept telling the Government even at the time of the Budget that you are over-emphasizing on your receipts. You are budgeting more receipts than you will get. (Contd. by NBR/3H)
SHRI PIYUSH GOYAL (CONTD.):It was obvious they could have never met that target when the economy was in downturn mode where the growth had fallen so drastically to sub-5 per cent level. So, obviously, the receipts were down by Rs. 60,000 crores. They claim to have cut the expenditure of the Government. But, what did they do? They cut the Plan expenditure by Rs. 92,000 crores, but increased the Non-Plan expenditure by Rs. 32,000 crores to show a balanced revised budget. All in all, what they have done is, they have increased the subsidy burden by Rs. 67,000 crores. They have reduced expenditure on Defence, which is the prime need of the mission to protect our boundaries where we see incursions everyday, by Rs. 5,000 crores on revenue account and Rs. 10,000 on capital account. We need to modernise the Armed Forces. They have also reduced the grants to the States by Rs. 6,000 crores and assistance to the States by Rs. 17,000 crores. Worst of all, they have reduced the capital expenditure of the Government of India by Rs. 77,000 crores. So, instead of creating assets for future, instead of creating assets for posterity, they are borrowing, they are increasing deficits, they are living hand-to-mouth and using that money only to pay salaries and imprudent expenses, but not investing in the capital infrastructure that this nation needs.
Further, we have a lot of Minority Members here who often talk about the injustice meted out to the Minorities. My side is often blamed for being anti-Minorities. But the track record of this Government shows that even on Minority affairs, they have not spent Rs. 1,000 crores which are available in the Budget. On tribal affairs, they have not spent Rs. 1,000 crores available in the Budget.
My good friend, Mani, stood to defend the Government, because we don't know how much he defends and how much he attacks the Government. But, in Panchayati Raj, which is so dear to him and his late friend, they have not spent Rs. 1,300 crores. All in all, this Government, which is in power for over nine years, have brought down the capital expenditure, as a percentage of Budget expenditure, from 23.1 per cent, which the NDA had left behind, to 11.72 per cent last year. So, effectively, they have halved the expenditure on capital investments in the country in the nine years they have in power. Certainly, I am sure, my dear friend, Mr. Singh, will not give them any brownie points for this complete mismanagement of the economy.
A lot was said on inflation. I would like to draw the attention of the hon. Finance Minister to a speech by his predecessor way back in 1947 when India got Independence. In 1947, the then Finance Minister recognized that inflation cannot be curtailed by monetary policy. He said, 'the present inflation is not due to further increase of currency, but to a steady fall in the supply of goods.' It is, Sir, elementary that unless supply side is tackled, inflation will never get controlled. I urge the hon. Finance Minister to focus on the supply side if at all they are looking to sort out the important problem of inflation.
Of course, a lot of Members have talked about the world economy. I wonder when the Indian economy was doing well, that also must have been because of the world economy, because if the downturn is because of the world recession, then upside must also be because of the world doing very well. So, I think, in effect, the Government has decided to acknowledge that they have no role to play in the Indian economy and they are only subservient to whatever happens in the rest of the world. But the fact is contrary. The Indian rupee is depreciating against all major currencies -- be it Dollar, Euro, Pound, Yen, and worst of all, the Renminbi. The highest depreciation is against the Chinese Renminbi. Even the Chinese Renminbi has appreciated against the US dollar by 6 per cent. They cannot justify mismanagement of the economy by just blaming the world for all this.
(COTND. BY KGG/3J)
SHRI PIYUSH GOYAL (contd.): China, in a similar situation, invested in infrastructure when they gave fiscal stimulus to their economy in the last three or four years. They didn't waste away money to just distributing it for mere vote bank or vote bank politics, just to earn some votes. They, in fact, strengthened the economy to be prepared for better times to come. We are, today, in a situation where the world will rebound but we will not get the benefit of that rebound because we have fainted ourselves into a corner where the country can't, in fact, anymore invest in the infrastructure needs of the nation.
What is the current situation as per Mr. N.K. Singh? He tried to say that the important legislations were not being passed. I would like to remind the House that the very fact is that this Government in UPA-I brought no legislation for reforms before the House. In UPA-II, all that they did was instead of focussing on issues where consensus could be built, instead of focussing on things which could be done outside the House--which are bureaucratic in nature, administrative in nature, governance in nature--they only focussed on the contentious issues. If there was a general mood of the nation that multi-brand retail should not be permitted, there was no need to vitiate the atmosphere of the House and spend the whole month or two to do a thing, as my senior colleague said, to pass a legislation which has got them zero FDI. There was no need at all to lose precious time of this House in not allowing a prestigious law, as the Lokpal, to be passed in this House; but they just dilly-dallied and taken months and months and let down the people on the streets who were hoping for some accountability from this Government. Sir, against the reforms the NDA did--the reforms in insurance, the reforms in banking, the reforms in pensions, the reforms in telecom, airport privatization, disinvestment of sick public sector units, power sector reforms, road projects in a massive way--all that this Government has left behind or will leave behind, as soon as they leave and make way for a better Government to come, will be a series of scams, and scams in the garb of so-called public good. In the garb of employment, they introduced MGNREGA. Member after Member have spoken about MGNREGA being withered away rather than creating assets for the nation. You don't pay people for the work not done. You pay people for the work done. You don't create a country which institutionalizes poverty. You don't create a country where it is good to be called poor so that the entitlements of the Government will take you along. We want an empowered nation.
We talk of becoming a super-power. We will be a super-power only when every youth of this country gets good education, gets good health, gets a job and has a working opportunity, lives a life of pride and not a life on doles of this Government. In the garb of power, in the garb of providing power for all by 2012, they gave us the coal scam. If only they had auctioned those coal mines, we could have today got Rs.5 lakh crores into the Government treasury and would not have to see the day where the Government is cutting on the capital expenditure and causing losses to the nation. In the garb of security, they do transactions like Tatra trucks, Agusta Westland; there are scams upon scams in the defence sector. In the garb of giving cheap telephony, they do the 2G Scam, they do the Antrix Scam. In the garb of growth, they give us consumption-led growth, but there is no job. Against 16 crore jobs provided by the NDA regime, they provide 6 crore jobs, they provide 27 lakh jobs. Every one of their actions loses the investors' confidence. The investor loses confidence not because legislation is not passed. One or two more legislation passed are not going to change the face of this nation. But, if this Government wants to get out of its paralysis, wants to get out of fighting with each other, wants to start taking decisions, wants to start taking retrospective tax amendments which the investors have completely lost faith when they overturn the judicial judgments, they were to stop smuggling of gold rather than increasing the taxes on gold. If they were to make the housewife and the young woman feel secure in this country, if they were to make investors have confidence to make investments in India, if they will not lose their money in depreciation, then let me assure you Sir, India would not be in such a dire state. (Time-bell)
(Contd. By TDB/3K)
SHRI PIYUSH GOYAL (CONTD.): Sir, I had requested the Chair, before you came, for two-three minutes more. Sir, please give me two-three minutes more.
MR. DEPUTY CHAIRMAN: No; you have taken extra six minutes. ...(Interruptions)... You didn’t sacrifice your time but. Everybody wants to talk more.
SHRI PIYUSH GOYAL: Sir, I want to make a couple of suggestions. Sir, the fact is that this Government in the garb of financing current account deficit has made claims, the hon. Prime Minister, the hon. Finance Minister are making claims, that they have protected the foreign exchange reserves of this country. I feel very sorry that my Ministers, that my hon. Prime Minister are misleading the nation. They have not protected the foreign exchange reserves of this country. I can keep my foreign exchange reserves at 280 billion dollars, but keep increasing my debt from 200 billion dollars to 300 billion dollars, now 390 billion dollars, in another year, it will be 490 billion dollars. Is that protecting the foreign exchange reserves?
MR. DEPUTY CHAIRMAN: Okay, please conclude.
SHRI PIYUSH GOYAL: Sir, when the NDA left the power, the net foreign exchange reserves vs. debt, we were surplus by one billion dollars. Today, the nation is 100 billion dollars negative on a net external debt.
MR. DEPUTY CHAIRMAN: Please conclude.
SHRI PIYUSH GOYAL: That is what we are leaving behind for the people. Sir, I just want to make a couple of quick suggestions.
MR. DEPUTY CHAIRMAN: No; you have taken extra seven minutes. Please conclude, Mr. Goyal.
SHRI PIYUSH GOYAL: If at all the Government is serious that they want to solve the problems of the nation, first of all, they will have to give bharosa, they will have to give confidence to the world, that this is a sincere Government; it is an honest Government; it is a Government which will act and not allow a Pulok Chatterjee Committee to take fifteen months against the slated three months.
MR. DEPUTY CHAIRMAN: Please cooperate.
SHRI PIYUSH GOYAL: They have to go with the Opposition, with other parties to build a national consensus on policy-making. Now, look at what they are playing with food security. ...(Time-bell)... In the garb of food security, they are making a fool of the poor. They have to instead address the genuine problems of the people.
Lastly, a small submission, Sir, I would submit to the hon. Finance Minister, please acknowledge where you have gone wrong and rectify your mistakes. Show the world, you are not dogmatic. That will separate the boys from the men. Thank you very much.
MR. DEPUTY CHAIRMAN: Now, Dr. Bhalchandra Mungekar.
DR. BHALCHANDRA MUNGEKAR (NOMINATED): Sir, I thank you very much for allowing me to participate in the debate.
SHRI RAVI SHANKAR PRASAD: You were the first speaker, where were you?
DR. BHALCHANDRA MUNGEKAR: I heard your speech completely when I was preparing my... ...(Interruptions)...
MR. DEPUTY CHAIRMAN: He wanted to reply to you. That is why he waited.
DR. BHALCHANDRA MUNGEKAR: Sir, I heard carefully the speeches of the hon. Members of the Opposition, and I should say with all humility that there was nothing substantially new because the Government itself is closely aware of some of the problems that you have been raising. The Government is seized of the problem and trying to find out proper solutions. Sir, mentioning the problems facing the Indian economy is different from painting the picture of the Indian economy that the Indian economy is bankrupt.
It is different to say Indian economy is dead and everybody should be ready for joining the funeral. Mere history of economic development after thirties’, if the world economy has survived with the greatest possible depression, which prolonged for seven years or eight years, it is not very difficult for an economy like ours, which is 1.7 trillion dollars, to survive the problems which the Indian economy is facing at present.
Sir, the able Finance Minister will reply to some of the questions probably in a holistic manner. But it is my responsibility to reply and settle some of the issues, probably permanently for this House to debate. I begin with the performance of the NDA during five years and the UPA, so far as the rate of economic growth is concerned. Ravi Shankar Prasadji mentioned that in the last year when they demitted the office, and today, in 2012-13, the rate of economic growth in India is five per cent. Sir, everybody knows, an elementary student of statistics and economics knows that statistics is most deceptive discipline. Therefore, rather than going for the starting point or the closing point, and rather than discussing the debate in the Chartered Accountant manner, I would simply take five-year period preceding the NDA. Take the NDA’s five years; the average annual rate of growth between 2000—2004-05 was 5.9 per cent.