Congress leader Anand Sharma also lashed out at the government, accusing it of “monumental mismanagement” of the economy and remaining in constant denial of the ground realities. He said the economy was “gasping” and “not galloping.”
Chidambaram said the government should stop making “tall claims” and bend down to do solid work.
“The recent social discontent therefore can be a direct manifestation of this economic slowdown, which the government was conveniently hiding,” he said.
He said that the investment picture remains bleak in overall terms and the fiscal deficit is likely to overshoot budget estimates of 3.2 per cent of the GDP, adding that “no amount of sugar coating, false bravado and rhetoric along with headlines management can conceal the stark reality”.
“Our fears and warnings have proved true. GDP growth in 2015-16, 2016-17 and 2017-18 (est) is 8.0, 7.1 and 6.5. These numbers prove there is a slowdown. A decline in economic activity and growth means loss of millions of jobs,” he said.
“New project announcements have declined, fresh investment is low, informal sector is still reeling under the ill-effects of demonetisation, job creation is abysmal, exports are plunging, manufacturing sector growth has slowed down, agriculture sector has been hit hard and rural despair is abundant.
“A dispassionate assessment reveals serious weaknesses in the Indian economy,” he said.
Chidambaram said the growth in GDP during 2017-18 is estimated at 6.5 percent as compared to the growth rate of 7.1 per cent in 2016-17 and anticipated growth of real GVA (gross value added) at basic prices in 2017-18 is 6.1 percent as against 6.6 percent in 2016-17.
“In a double whammy, retail inflation soared to a 15-month high of 4.88 per cent in November and industrial output slowed to a three-month low of 2.2 per cent in October,” he added.
New project announcements by Indian companies touched a 13-year low of Rs 77,000 crore in the December quarter, according to the Centre for Monitoring Indian Economy, he said.
“The manufacturing sector has seen the sharpest fall in new project announcements. Job creation remains the single biggest failure of this BJP Government. In a slowdown, how will jobs be created? And how will the promised 2 crore jobs per year be created?”
Bank credit growth is extremely sluggish which doesn’t bode well for the economy, Chidambaram added.
Sharma meanwhile asked if Modi and Finance Minister Jaitley will stop saying that India is the fastest-growing economy.
“It is under the watch of the Prime Minister and his Finance Minister that the national investment rate has fallen. The credit off-take by the industry has hit a historic low of 65 years. The GDP growth is now at a four-year low,” he said.
“It is a matter of concern again that 33 per cent jobs have been officially stated to be lost in the informal sector which employs 90 per cent of India’s work force. Over 3.72 crore jobs have been destroyed by this government whereas only few lakh jobs have been created,” he added.