Mumbai: Senior BJP leader and former Finance Minister Yashwant Sinha on Wednesday questioned the methodology of the GDP calculation adopted by the Modi government and said the growth rate of 5.7% declared recently is actually 3.7% or even less.
"The methodology for calculation of the GDP was changed by the present government in 2015 as a result of which the growth rate recorded earlier increased statistically by over 200 basis points on an annual basis.
"So, according to the old method of calculation, the growth rate of 5.7 per cent is actually 3.7 per cent or less", Yashwant Sinha wrote in an article published in the Indian Express titled "I need to speak up now".
Yashwant Sinha also refuted the claim by BJP president Amit Shah that the GDP rate of 5.7% is on “technical" ground and the actual rate is high.
"The SBI, the largest public sector bank of the country, has stated with unusual frankness that the slowdown is not transient or “technical”, it is here to stay and the slowdown in demand has only aggravated the situation.
"It has openly contradicted what the BJP president said just a few days ago that the slowdown in the last quarter was on account of “technical” reasons and will be corrected soon. According to the SBI chairman, the telecom sector is the latest entrant to the long list of stressed sectors", Sinha wrote.
He also wrote what he calls "the mess the Finance Minister (Arun Jaitley) has made" of the economy and remarks that many may share his views but are silent out of "fear".
"I shall be failing in my national duty if I did not speak up even now against the mess the finance minister has made of the economy. I am also convinced that what I am going to say reflects the sentiments of a large number of people in the BJP and elsewhere who are not speaking up out of fear", the senior BJP leader said.
"Jaitley was, to begin with, a lucky finance minister, luckier than any in the post-liberalisation era. Depressed global crude oil prices placed at his disposal lakhs of crores of rupees. This unprecedented bonanza 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 like the crude oil bonanza.
"But the oil bonanza has been wasted and the legacy problems have not only been allowed to persist, they have become worse", Sinha said.
"Private investment has shrunk as never before in two decades, 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,
"Demonetisation has proved to be an unmitigated economic disaster, a badly conceived and poorly implemented GST has played havoc with businesses and sunk many of them and 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, the lowest in three years. The spokespersons of the government say that demonetisation is not responsible for this deceleration. They are right. The deceleration had started much earlier. Demonetisation only added fuel to fire", he added.
Sinha views are widely hailed. The first to react on Sinha's article was former Finance Minister P Chidambaram.
"ETERNAL TRUTH: No matter what Power does, ultimately Truth will prevail", he wrote on Twitter.
ETERNAL TRUTH: No matter what Power does, ultimately Truth will prevail.— P. Chidambaram (@PChidambaram_IN) September 27, 2017
In his earlier tweet, Chidambaram had said, "Yashwant Sinha speaks Truth to Power. Will Power now admit the Truth that economy is sinking?"