TOUGH STEPS ESSENTIAL TO TRIM DEFICIT AS UPA’s 10 YRS. MISRULE LET IT BALLOON: BALBIR PUNJ

TOUGH STEPS ESSENTIAL TO TRIM DEFICIT AS UPA’s 10 YRS. MISRULE LET IT BALLOON: BALBIR PUNJ

TOUGH STEPS ESSENTIAL TO TRIM DEFICIT AS UPA’s 10 YRS. MISRULE LET IT BALLOON: BALBIR PUNJ

No.PR-48
June 18, 2014
New Delhi

TOUGH STEPS ESSENTIAL TO TRIM DEFICIT AS UPA’s 10 YRS. MISRULE LET IT BALLOON: BALBIR PUNJ

Mr. Balbir Punj, National Vice-President of Bhartiya Janata Party has called for tough measures to bring down the growing fiscal deficit, which is leading the country to a debt trap.

Addressing the Managing Committee of the PHD Chamber of Commerce and Industry here today, Mr. Punj said that in the last ten years of UPA “misrule, the central Government has incurred a fiscal deficit of over Rs.32 lakh crores.”

“Such a huge fiscal deficit,” Mr. Punj said, “has played havoc with the economy.” The UPA regime, he alleged “was reckless in wasting money on populist schemes, with huge leakages, and in granting tax waivers.”

Mr. Punj alleged, “this misguided policy resulted in starting a vicious cycle of high inflation and high interest rates.” The outcome of “irresponsible financial behaviour naturally had a ripple effect,” Mr. Punj added.

Elaborating this point, Mr. Punj said high interest rates in turn pushed up capital servicing cost for the entrepreneurs. “As a result the Indian industrialists were put to disadvantage and they found it difficult to compete in the global scene.”

Indian manufacturing, Mr Punj said, obviously was the first casualty of this approach and the share of Indian industry has shrunk to about 14 percent of the GDP. “No wonder that our consumer markets are full of Chinese merchandise,” he added.

Tracing the history of Indian economy, Mr. Punj said, “India along with China were major economic power till 18th century, accounting for over 60 percent of the global GDP.”

Quoting studies by celebrated economists, such as Paul Berauch and Aungus Maddison, Mr. Punj said, “ the decline in Indian industry started with the arrival of the British and as result, India’s share was reduced to just two percent of the global GDP when they left in 1947.”

Mr. Punj further added, “the subsequent socialist system of economy adopted by India after independence destroyed the entrepreneurship, initiative and led the economy to near destruction”. 

“Because of these disastrous policies, India was forced to pledge its gold stocks in 1991”, Mr. Punj added.

Emphasizing the role of non-formal sector in the Indian context, Mr. Punj said the listed corporates account for only four percent of the national economy.

Quoting Credit Suisse, he said, “the listed corporates (BSE 500) account for only four percent of the national consumption and the formal sector account for 10 percent of the national employment.

The corporate sector contribution to the GDP of India, Mr. Punj said, was 14-15 percent, Agriculture 17%, Government 23% and the balance 44-45% is contributed by non-corporate sector.

Mr. Punj pleaded for special treatment to the non-corporate sector in order to kick start the economy to its full potential, increase employment, rein in inflation and to provide an impetus to savings and investment.
ENDS
Koteshwar Prasad Dobhal
Consultant (PR)