The interim Congress president said demonetisation in 2016 was the origin of the ongoing crisis in the Indian economy.
In an article written for The Hindu on Thursday, interim Congress President Sonia Gandhi lashed out at the Centre over its disinvestment policy, alleging that the ‘fire sale of assets is to help the crony capitalists close to the government’.
Mrs Gandhi, referring to former Prime Minister Manmohan Singh’s “prescient words in Parliament” that demonetisation would lead to a 2% drop in the GDP, said demonetisation in 2016 was the origin of the ongoing crisis in the Indian economy.
In a piece titled “The distress sale of national assets is unwise”, she said: “The origin of the ongoing crisis in the Indian economy was the fateful night of November 8, 2016. Dr. Manmohan Singh’s prescient words in Parliament – that demonetisation would lead to a 2% drop in the GDP – were not heeded by Prime Minister Narendra Modi.”
“On the contrary, a badly designed and hastily implemented flawed Goods and Services Tax (GST) followed, further devastating vast numbers of medium and small enterprises, as well as the vast informal sector of the economy. Together, these twin disasters robbed millions of their livelihoods and plunged the Indian economy into a prolonged slump that predates the COVID-19 pandemic,” she further wrote.
The Congress president also attacked the BJP government for high fuel taxes and on “distress sale” of PSUs as it fails to meet the disinvestment target.
“The Modi government is using the economy’s collapse since the pandemic to rush headlong into its mission of handing over large portions of India’s wealth to its favourite crony capitalists. It has announced its intent to become cash rich by selling the family silver, through hasty privatisation of India’s public sector undertakings (PSUs).”
She said the Modi government has explicitly embraced “privatisation”, instead of “disinvestment”.
“Its choice of language signals its intent. Unable to manage the nation’s finances, unable to inspire trust in the private sector to boost investment, the government has turned to distress sale of our national assets. Will selling assets for short-term gains make up for the long-term loss of public wealth?” she asked.
“This fire sale is being justified by citing enhanced efficiency and the generation of funds for the government’s welfare programmes. This is a deceptive argument. What we are likely to witness in reality is the privatisation of PSU profits, and the nationalisation of private sector losses.”
“In the garb of privatisation, valuable assets and profit-making companies will be undervalued and sold to cronies who will make a killing. On the other hand, defaulters with huge loan burdens will be bailed out using public funds,” Mrs Gandhi alleged.
“Executed carefully and strategically, disinvestment (which is the sale of a part of the government’s shares in PSUs) can generate resources for the government, set the right incentives for their managements, and reward the investing public. In that spirit, in our 2019 Manifesto, the Congress party promised a middle path to disinvest from only non-core, non-strategic public sector enterprises,” sh stressed.