The government has failed to provide the benefit of the low oil prices in the global markets, says Milind Deora.
Former Union minister Milind Deora is known for his articulate views on various issues impacting our country. Mr Deora, a close aide of the recently resigned Congress president Rahul Gandhi, has been vocal about the economic downturn in India and had also urged the Congress leadership to come up with a credible economic narrative to counter the BJP. The two-time MP from Mumbai South spoke to APRAMEYA RAO on the state of the Indian economy. Edited excerpts:
Q. Recent reports about the economy are not at all good. Your first reactions?
A. There has been a clear mismanagement of the economy in the last few years. The economic problems have been exacerbated by the weakening of domestic demand and sluggish growth rate.
Q. A Moody’s report had pegged India’s growth rate at 7.3% for 2019. Later, the IMF brought it down to 7%. Now CRISIL has predicted 6.9% growth rate for FY 19-20. Where did India’s growth story go wrong?
A. I feel there are three major reasons for the India story going haywire under the current regime. Firstly, the shrill rhetoric in the country, which is unfortunately anti-trade and anti-entrepreneur. The business sentiment across the country is weak at the moment. Secondly, knee-jerk policies like demonetisation have only proven to be disastrous for the economy. Thirdly, I also feel that the government has been unable to take advantage of the strong global tailwinds.
The government has failed to provide the benefit of the low oil prices in the global markets. Lower oil prices could have led to lower interest rates too. With China slowing down, it is a great opportunity for India to make its presence felt.
However, I feel the government, with its massive mandate in 2014 and 2019, has failed to take advantage of the global scenario.
Q. The unfortunate death of CCD founder VG Siddhartha has once again brought the horrors of “tax terrorism” to the fore. However, the government has been highlighting the improvement in India’s “ease of doing business” rankings. What do you make of the dichotomy?
A. This is an unfortunate development. While I genuinely wish that the improvement in India’s global ranking is true, the ground reality does not seem to reflect it. There is a lot of pain and distress among entrepreneurs on the ground. But I feel the government is not totally in sync with the ground realities being faced by entrepreneurs. We need the entrepreneurs to speak out and show the mirror to the government. There is however a prevailing environment of fear which is preventing them from speaking out.
Q. Is this fear due to the apprehension that the government may go after them? Since several years, critics have blamed sleuths for harassing business in the name of crackdown on tax evasion. Your take?
A. Certainly, this is true to a large extent. There is a fine line between business failures and being a crook. It is not wise to term an unsuccessful businessman a “crook”. I hope the government starts an honest engagement with the entrepreneurial community. This will help the government to introspect over its excesses.
Q. The 2019 Budget was blamed for imposing additional surcharge on the rich. So, are we now witnessing a leftward turn in Indian economy?
A. I don’t think this is much of an issue. I feel there are more serious issues to tackle. However, I would like to remind the government that we haven’t seen any major economic reform since 2014. With a massive mandate, the people of India expected a lot from the government. We still have loss making PSUs. Why haven’t they been disinvested so far? It is clear that the government is living in an echo chamber and not willing to listen.
Q. Let me pose a hypothetical scenario. What would have Congress done if it was in power instead of the BJP?
A. There is an urgent need to open communication channels with the business community. Congress would create a democratic environment to listen to entrepreneurs. This is missing right now. When we offer them such an atmosphere, I am confident that some solution will also come out of it.