A key member of Prime Minister Narendra Modi’s Economic Advisory Council has blamed former Finance Minister Pranab Mukherjee’s decision to tax business retrospectively and the Supreme Court’s cancelling of coal blocks since 1993 for the downturn in the Indian economy today. Shamika Ravi said that these two key decisions started the Indian economy on the downward journey.
In a series of tweets Ravi wrote, “Objective of economic reform is to reduce policy uncertainty in the economy. Private investments in India have been declining since 2012: after Pranab Mukherjee’s retro taxes and then SC cancellation of all coal block allocations since 1993(!)…anyone estimated growth foregone?”
Objective of economic reform is to reduce policy uncertainty in the economy. Private investments in India have been declining since 2012: after Pranab Mukherjee’s retro taxes and then SC cancellation of all coal block allocations since 1993(!)…anyone estimated growth foregone? https://t.co/hf1VWdIaMT
— Shamika Ravi (@ShamikaRavi) September 9, 2019
Her subsequent tweet read, “Bank #NPA story can be explained by the following graph (thanks @muditkapoor )-major growth of bank exposure to power sector (after 1998 reforms)making India a power surplus economy. Then suddenly SC cancels almost all coal block allocations since 1993. Overnight #NPA #Uncertainty.”
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Bank #NPA story can be explained by the following graph (thanks @muditkapoor)-major growth of bank exposure to power sector (after 1998 reforms)making India a power surplus economy. Then suddenly SC cancels almost all coal block allocations since 1993. Overnight #NPA #Uncertainty pic.twitter.com/afDYaYyHTA
— Shamika Ravi (@ShamikaRavi) September 9, 2019
Ravi was reacting to comments made by former Chief Economic Adviser Dr Pronab Sen, who said that demonetisation was the ‘initial trigger’ for the current economic slowdown. Sen told the Huffpost India website that the ‘principal source’ of the economic slowdown in India was the ‘liquidity crunch’ that resulted from the controversial demonetisation exercise of 2016.
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Last year, Janta Ka Reporter in a special analysis had carried a piece outlining how the cancellation of coal blocks resulted in the closure of mines rendering lakhs of workers jobless. The trickle-down effect of killing the operational coal mines impacted growth, employment opportunities and investments not only in the coal but also in the power, steel, cement, fertiliser and infrastructure sectors. The slump in all these sectors had also contributed to the rise in NPAs of banks.
