August 14, 2013

Speech in Rajya Sabha on ‘The State of the Economy’

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 we 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, It was obvious they could have never met that target when the economy was in downturn mode and 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 nation to protect our boundaries where we see incursions every day, by Rs. 5,000 crores on revenue account and Rs. 10,000 crores on capital account. We need to modernize 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. Instead of creating assets for the 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 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-Minority. But the track record of this Government shows that even on Minority affairs, they have not spent approx. Rs. 1,000 crores which was available in the Budget. On tribal affairs, they have not spent approx. Rs. 1,000 crores available in the Budget.
My good friend, Mani, stood to defend the Government, We do’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, has 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. Effectively, they have halved the expenditure on capital investments in the country in the nine years they have been in power. Certainly, I am sure, my dear friend, Mr. N.K. 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 alone. 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, whether that also must have been due to the world economy, because if the downturn is due to the world recession, then the upside must also be due to 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 to the 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. In fact the Chinese Renminbi has appreciated against the US dollar by about 6 per cent. They cannot justify their mismanagement of the economy by just blaming the world for all of this. China, in a similar situation, invested in infrastructure when they gave fiscal stimulus to their economy in the last three or four years. They did not waste away money to just distribute it for mere votes 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 painted ourselves into a corner where the country cannot, in fact, invest anymore in the infrastructure needs of the nation.
What is the current situation as per Mr. N.K. Singh? He tried to say that important legislations were not being passed. I would like to remind the House that the 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 in the nation that multi-brand retail should not be permitted, there was no need to vitiate the atmosphere of the House and spend a 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 took months and months and finally 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 has spoken about money under MGNREGA being withered away rather than creating assets for the nation. You do’t pay people for the work not done. You pay people for work done. You do’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 or has a working opportunity, lives a life of pride and not a life dependent 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 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 dewas Antrix Scam. In the garb of growth, they give us consumption- led growth, but there are no jobs. Against 6 crore jobs provided by the NDA regime, they provided only 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 legislations passed are not going to change the face of this nation. But, if this Government was to get out of its paralysis, was to get out of fighting with each other, was to start taking decisions, was to stop taking retrospective tax amendments which caused the investors to completely lose faith, when they overturn judicial judgments, if 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 that when they invest in India, they will not lose their money in depreciation, then let me assure you Sir, India would not be in such a dire state. 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. 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 is 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 is misleading the nation. They have not protected the foreign exchange reserves of this country. I can keep my forex 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 power, the net forex reserves vs. external debt, was surplus by one billion dollars. Today, the nation is 100 billion dollars negative on forex reserves net of 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 how they are playing with food security. 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.

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