Senior Congress leader P Chidambaram on Monday said the country was paying a heavy price for the “nonchalant and uncaring” attitude of the Narendra Modi government, as India’s Gross Domestic Product contracted by 23.9% for the April to June quarter of the current financial year. This is the most devastating economic collapse recorded in over four decades, and also the first ever decline in the GDP since India began publishing quarterly records in 1996.
In a series of tweets, the former finance minister said that a decline of a “whopping 23.9%” could mean that about one quarter of the gross domestic output as on June 30, 2019, has been wiped out in the last 12 months. “Another way of looking at it is, since the end of 2019-20, the gross domestic output has fallen by about 20%,” he added. “The only sector that has grown is agriculture, forestry and fishing at 3.4%.”
Chidambaram took a swipe at Nirmala Sitharaman and said the Union finance minister who had blamed “Act of God” for the economic decline should be grateful to the “farmers and the gods who blessed the farmers”. Sitharaman had last week termed the pandemic an “Act of God” to justify a revenue shortfall of Rs 2.35 lakh crore under the goods and service tax regime.
The Congress leader pointed out that every sector of the economy has declined sharply, “some precipitously”. The data released by the Ministry of Statistics and Programme Implementation showed that the construction industry was worst hit with a contraction of 50.3%, followed by the trade, hotel, transport, communication segments, which contracted 47%.
However, Chidambaram added that the estimates did not come as a surprise to him. “They should be a matter of surprise to the government that was seeing ‘green shoots’ on several days during the first quarter,” he added. “They should also be a matter of shame to the government that did nothing, literally nothing, to cushion the fall by taking suitable fiscal and welfare measures, but we know that the Modi government has no shame and will not acknowledge its mistake.”
The former finance minister said the country’s grim economic milestone amid the coronavirus pandemic, was an “economic tragedy” that was foretold by many close observers, and most recently by the Reserve Bank. In its annual report for 2019-’20 published last week, the central bank said the pandemic could cause a structural downshift in the potential output of the Indian economy, which could continue into the second quarter of 2020-’21, i.e. July-September.
Chidambaram said that the RBI had pointed out that the economy will take “quite some time” to mend and regain its pre-Covid momentum because of the severe shock to consumption. The bank had also said that a majority of respondents reported pessimism relating to the general economic situation, employment, inflation and income, he added.
“All these had been anticipated, we had warned the government and urged the government to take preventive and preemptive measures,” the Congress leader said. “Our pleas fell on deaf ears. The country, as a whole, is paying a heavy price, the poor and the vulnerable are in despair.”
He accused the Bharatiya Janata Party-led government of peddling a fake narrative. “It is only the Modi government that was nonchalant and uncaring,” he said. “The government peddled a fake narrative, but that narrative has been exploded today by the CSO estimates.”
Meanwhile, Congress leader Rahul Gandhi in a tweet said that it was unfortunate the government chose to ignore his repeated warnings about the crumbling state of economy. “GDP reduces by 24%,” Gandhi wrote. “The worst in Independent India’s history. Unfortunately, the government ignored the warnings.”
The Congress leader shared a video from earlier this year when he had warned that Indians would have to go through “unimaginable pain” if the government does not immediately address the economic situation.
Despite the government’s plans to strategically ease restrictions of the lockdown, which was first enforced in March, many experts had predicted that the economy would register negative growth. India had imposed a nationwide lockdown on March 25. The lockdown was slowly eased, and by June 1, most non-essential services had been allowed to operate in non-containment zones in the country, subject to policies made by states.