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Tuesday, December 8, 1998
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Economy off the rails: Pranab
Tribune News Service

NEW DELHI, Dec 7 — The Congress today launched an attack on the BJP-led coalition government for, what it called, the total mismanagement of the economy. The country was heading towards a balance of payment crisis as was the case in 1990.

Initiating a short duration discussion on worsening price situation and economic recession in the Rajya Sabha, the Congress Chief Whip, Mr Pranab Mukherjee said signals of virtual economic collapse were evident with revenue collection falling short by a massive Rs 10,000 crore during the first five months of 1998-99 itself.

He demanded an inquiry into onion imports, and said that there were reports of a difference of $ 129 per tonne between the prevailing international price at which the government imported onion and the export price which it got for the product.

"If it is a fact that some recalcitrant elements or somebody wanted to make a quick buck out of these imports they should be penalised", Mr Mukherjee said.

Giving statistics, Mr Mukherjee said the inflation rate had doubled from 8.2 per cent in September this year as against 4.3 per cent in the corresponding period of 1997.

The trade deficit had doubled from $ 2.5 billion during the first six months of 1996-97 to about $ 5 billion during April to September this year, he said adding that all the economic parameters pointed to a slide down of the economy.

Mr Mukherjee said a board consensus should be evolved on issues such as subsidies which account for 15 per cent to 16 per cent of the GDP.

The former Commerce Minister criticised the government for taking a long time to finalise the Ninth Plan projections and said the first two years after the completion of the Eighth Plan, from April 1997 have been Plan holidays.

He alleged that the government had failed to take appropriate measures for stepping up infrastructure development and added that it was not feasible to raise resources for the purpose from the market as interest rates were as high as 13 per cent to 14 per cent per annum. He said the government did not even deem it fit to consult former Finance Minister Manmohan Singh, to whom goes the credit of putting the Indian Economy back on rails in 1991.

Mr Mukherjee, however, welcomed the move to step up government expenditure by 14 per cent saying this would generate demand and would have positive effects in various sectors of the economy.

Mr Raghavji (BJP) urged the Government to take steps to increase production of vegetables, pulses and oil so that these essential commodities were available to people at a reasonable rate. He also suggested an anti-dumping levy on imported consumer goods to protect Indian Industry producing the same goods.

Dr Ashok Mitra (CPM) urged the government to examine whether it should continue with the policy of liberalisation adopted seven years ago, as it had not been successful. He said that since the time reforms had been introduced, the country’s economic growth and industrial growth had been halved. Even the rate of agricultural production had fallen below the rate of population growth for the first time since the independence.

Dr Mitra also opposed the opening of the insurance sector and said that it was a fallacy to presume that it would bring in $ 80 million of foreign exchange. Foreign companies were interested in taking money out of the country instead of bringing it in, he said.back

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