Skeletons of demonetisation-GST haunt Modi government

The Modi government is caught at economic crossroads. While the low industrial output and sluggish exports is pulling down the GDP, the impact of demonetisation and chaos over GST is hovering concerns of unemployment. Jagdeesh Chandra, CEO, Regional Channels, unravels the issues and complexities that are putting the brakes on economic growth of the country. Excerpts:   

Has government got scared of discussions over economic slowdown? Has GST Council taken decisions in a haste?

If we look at sequence and turnout of events, a meeting takes place on 28th September at 5 p, at Arun Jaitley’s residence, 51 politicians participate in that meeting out of which 15 are cabinet ministers. In that meeting they discuss on how to allay fears related to GST. After that, Amit Shah is called on 3rd October and he returns to Delhi from Thiruanathapuram in between. On 4th October Shah meets the Prime Minister and Arun Jaitley and on 6th October meeting of GST Council is convened and major decisions are taken. So it can’t be ruled out that there is definitely a fear factor in the government.

Has the changes taken place on suggestions of Bhagwat? Has the negative feedback of Gujarat forced the government to take the bait?

Both the reasons are valid… First reason is speech of Mohan Bhagwat on Dussehra… Bhagwat generally appreciates Modi government in his speeches. But this time it was a complete reversal. 90% was advisory and 10% was appreciation of government’s works. He openly said that government has to take care of the impact of demonetisation and GST. Then role of Bhagwat was definitely there. RSS has given feedback to the Prime Minister on Gujarat election. There are chances of winning only 64 seats which must have created panic in the government.

Has the government really come on the backfoot? Is it a temporary withdrawal?

The government is on the backfoot and it is temporary also. Modi and Shah are true to their colours. They never say die. But this time it seems that the government has been cornered.

Has the government come under pressure due to statements of Sinha, Shourie, Gurumurthy and Swami? Why Gurumurthy and Swami are criticizing their own government? Why Modi supporters too are criticizing demonetisation-GST

These two issues have created a ruckus in the country. The kind of economic situation country is going through and the kind of opposition RSS and other affiliated organisations have voiced against GST-demonetisation, the time has come when these issues should be raised and the image of ‘Yes Man’ of government has to be broken.

Has the Prime Minister also received negative feedback? Is the mood of the country really changing?

The Prime Minister has his own way of getting feedback. He has received negative feedback. He has sourced it from IB and other sources. He has deciphered the feedback and recognized it by taking corrective measures in the GST Council.

Was the relaxations announced on Friday adequate? Will there be more such decisions in the next meeting of GST Council scheduled at Guwahati?

The GST Council has taken 3-4 major decisions in the meeting. First businesses having turnover of less than Rs 1.5 crore need not to file returns every month. It slashed rates on 27 goods and third GST on man made yarn has been reduced from 18% to 12%... so far there is no relaxation for builders but jewellers have got some relief. At the end, whatever relief has been showered looks adequate.

Has Sinha and Gurumurthy once again opened the Pandora box of demonetization?

Try to remember statement of former prime minister Manmohan Singh who said that India is the first ever country where you can deposit money in the bank but you can’t withdraw it. Apart from that RBI has released a statement which says only 1% of black money is left out from the system. Prompted by this, Arun Shourie said, “It’s part of the money laundering and this is the largest money laundering in this government.” This has refreshed the agony of demonetization.

Will Modi-Jaitley do introspection on the first anniversary of demonetization on 8th November?

During last one year, much has been done about demonetization. It is expected that the way there has been few amendments in GST, there could be some changes in provisions for demonetization.
n Why there is so much of hullabaloo over dip in GDP?

This is not for the first time that GDP has dipped. Few days back Modi has said that during the regime of Manmohan Singh, GDP has dipped below 5.75% 8 times in 6 years. Then there was no noise.

Has rebellion made Sinha a hero?

The opposition of Yashwant Sinha is not new. When Sinha said majority of people said that he is presenting voice of nation. That’s why it can be said that for few days Yashwant Sinha definitely has emerged as hero.

Will the party take action against Sinha? Can Sinha quit BJP?

Whatever Yashwant Sinha has said comes under the category of indiscipline but it depends on BJP how much it absorbs it as part of internal democracy. But the government will have to think 10 times before taking any action. Sinha is a senior BJP leader and former finance minister. RSS has a soft corner for him…. It can’t be said that party will serve a notice on him. If the party throws him out then it has to be seen whether he raises his voice sitting in Hazaribagh or joins any other party.