Yashwant Sinha explains how Modi broke the economy in new book

Bureaucrat, a finance minister and a politician: Yashwant Sinha has been all of these. Now he adds to this list by playing the role of a dissident. India Unmade consolidates his stated opposition to the duo of Prime Minister Narendra Modi and finance minister Arun Jaitley presiding over what he calls the “lost half-decade”; the five-year tenure of the Modi government, which came to power with a clear majority in 2014, the first government to achieve this feat in 30 years.

“While others may have stifled their own dissent, I have not. I cannot remain silent; history will not forgive me if I did,” Yashwant Sinha says. He was finance minister in 1990, before Dr Manmohan Singh liberalised the economy, and then during most of Atal Bihari Vajpayee-led NDA-1’s tenure before 2004. So, he has steered the economy during one of its most difficult phases and then through one of its most vibrant and high-GDP phases. He does not boast of the kind of expertise that Dr Singh comes with, but Yashwant Sinha shows how circumstances shape a person.

Sinha, who quit the Bharatiya Janata Party in April 2018, takes great pains to show that NDA-2 is different from NDA-1, both in terms of policy and ideology. Moreover, the current policy spearheads, Modi and Jaitley, have never been privy to the BJP’s ideological position on policy issues such as finance, economy and trade, he asserts. This is the prime reason behind such misadventures as demonetisation and a hurriedly-implemented Goods and Services Tax with unwieldy tax slabs. The unfolding Indian banking crisis reflected in the burgeoning nonperforming assets on lenders’ loan books is also discussed by Sinha. He asserts a moral responsibility – “I speak out now in the national interest.”

The book makes for an interesting read due its lucid style. The narrative is intent-driven, but not over-the-top. The main takeaway for any reader is that Yashwant Sinha is an authoritative voice on the workings of Indian economy – he simply shows that the Modi government’s policies reflect a misunderstanding of how the Indian economy works. For example, he says the government missed its opportunity to use the historically low crude oil prices to increase demand in the economy Instead, the government chose to increase taxes and commissions, making the citizens pay more. Yashwant Sinha says demonetisation reflects a basic misunderstanding of how black money works, proven by the fact that more than 99 per cent of the outmoded notes were returned to the RBI. The informal sector bore the brunt of this exercise, Sinha says.

Narendra Modi as Gujarat CM vehemently opposed the implementation of GST under UPA-2, but ‘championed’ the passage of the single indirect tax regime in 2017. This one of Modi’s several policy flip-flops, Sinha says. The promise of employment through such initiatives as Make in India has fallen flat. It is counterproductive to transplant the Chinese model of export-driven consumption in India, Sinha says. Meanwhile, the government has used fiction to address the problem of unemployment. The PM said that a roadside pakoda seller is also gainfully employed, but not accounted for in official statistics. The labour ministry’s quarterly employment survey figures showed that only 2 lakh new jobs were added between September 2017 and April 2018, post-implementation of GST, according to Yashwant Sinha. Instead, the Central Statistics Office (CSO) used the Employees’ Provident Fund Organisation’s figures to say that 41 lakh new jobs were created during the same period.

But these figures indicate the formalisation of existing jobs post-GST, instead of new jobs created, Sinha states. This is troublesome because it shows the NDA-2 governments’ tendency to pick and choose numbers. In a similar vein, the NITI Aayog issued a revised GDP series to show slower growth owing to the 2008 economic crisis under the UPA, and the increased growth under NDA-2. It is not that Yashwant Sinha is all praise for the UPA’s record on employment generation; he strongly criticises MNREGA,which offered employment but did not create any structures of public utility. The PM had called MNREGA a “living monument of your (the Congress’) failures.”

Therefore, Sinha is surprised that the Modi government allocated a record sum of `55,000 crore to the scheme. The book’s narrative is balanced and mostly backed by figures, as it should be when co-written by a finance minister and a journalist. It also displays chutzpah in its word play on signal NDA-2 schemes for chapter names: “Gayi Sarkar Teri Tax” and “Break in India,” among others. The reader is left wondering whether Sinha saw a dangerous divide in society during his ministerial days as well.Interestingly, the effects of mob justice and lynching on business and foreign direct investment are penned in as afterthoughts in the book’s epilogue. That too, based on Yashwant Sinha’s experience at a recent meeting in Germany. This is unsettling coming from a seasoned politician who has steered the economy through momentous years.