Chidambaram Responsible for Financial Woes: Gurumurthy

Chidambaram Responsible for Financial Woes: Gurumurthy

Eminent economist S Gurumurthy has said economic policies of the UPA government have adversely impacted the economy.

"Under the UPA rule, the rupee has lost 35-50 per cent of its value while foreign debt has risen four times. Forex reserves which were two and half times of the foreign debt are now just three-fourths of the debt," Gurumurthy said while delivering a lecture on "Decade of economic destruction how to recover?" organised here on the weekend.

Gurumurthy said imports of capital goods rose and destroyed the manufacturing base of India.

"...And yet Chidambaram (Union finance minister) claims he has left behind a healthy economy," he said. The lecture was organised by Bharat Vikas Parishad.

"When Chidambaram left as Finance Minister in October 2008, the country had incurred a current account deficit of over USD 60 billion. When he came back he added another USD 125 billion. It is the current account deficit, which knocked off the rupee value by almost half. The rupee was 45 to a dollar and it fell to almost Rs 68 to a dollar by August 2013," Gurumurthy said.

"Chidambaram gloats over the forex reserves touching USD 300 billion and projected them to rise to USD 325 billion before the UPA's term ends. But he would not utter a word about almost the four-fold rise in foreign debt from USD 112.6 billion in 2004 to USD 426 billion by December 2013," Gurumurthy said.

He said, "the current account deficit topped USD 360 billion, approximately half of which occurred when Chidambaram was finance minister and the other half when Pranab Mukherjee headed the Ministry of Finance. But Chidambaram's entry as finance minister signalled the start of current account deficit from 2004-5," he said.

"The earlier two years under the NDA yielded current account surplus of USD 22 billion after almost 25 years of continuous current account deficits. Chidambaram had praised the NDA for leaving a robust external balance. But the UPA inflicted a current account deficit of USD 360 billion in 10 years," Gurumurthy said.

He said that instead of making the economy rise, capital goods import knocked down the domestic capital goods sector by 10 per cent and brought down manufacturing growth from 11.5 per cent to 2.9 per cent in 2012-13.

"The Planning Commission data as of March 10, 2014 shows the NDA rule between 1999-2004 had generated 60.7 million jobs in five years. But the UPA, in the six years from 2004 to 2010 generated just 2.7 million jobs....A mere 37,500 jobs per month," Gurumurthy added.

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