Structural reforms necessary: Jayant Sinha's rejoinder to father Yashwant Sinha

WION Web Team New Delhi, Delhi, India Sep 28, 2017, 05.43 AM(IST)

MoS for civil aviation Jayant Sinha defended the government in an editorial written for a media outlet. Photograph:( DNA )

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Jayant Sinha said that demonetisation and the introduction of the GST were structural reforms that were necessary for transforming the economy

Minister of State for Civil Aviation Jayant Sinha today (September 28) defended his father and senior BJP leader Yashwant Sinha's criticism of the "mess" that finance minister Arun Jaitley had made of the economy.

In an editorial in The Times of India, Jayant Sinha countered his father's criticism that the slowdown in GDP growth rate was because of demonetisation and the recently-introduced Goods and Services Tax (GST).

Jayant Sinha said that demonetisation and the introduction of the GST were structural reforms that were necessary for transforming the economy in the long term and that GDP growth of one or two quarters was insufficient to ascertain the long-term impact of these measures.

The MoS Civil Aviation added that along with digital payments, GST and demonetisation would bring more people under the tax net and create transparency in the economy.

"GST, demonetisation and digital payments are game-changing efforts to formalise India’s economy. Transactions that were taking place outside of the tax net and in the informal sector are now being brought into the formal sector. In the long term, formalisation will mean (a) tax collections go up and more resources are available to the state; (b) friction in the economy is reduced and GDP goes up; and (c) citizens are able to establish credit more effectively as transaction records are digitised," Jayant Sinha wrote.

He said policy-making across industries had become more rules-based, auctions were more transparent and the Bankruptcy Code would provide relief to the long-standing problem of Non performing Assets in the banking sector.

Jayant Sinha also highlighted the benefits that the "rules-based FDI regime" and the linking of the Jan Dhan accounts with the Aadhaar Unique Identification Card had brought to the economy."

"The Jan Dhan-Aadhaar-Mobile (JAM) trinity is powering Direct Benefit Transfer (DBT) and dramatically reducing leakages. Rs 1.75 lakh crore of benefits have been transferred directly to beneficiaries over the last three years. JAM is weeding out many ghost and fake beneficiaries and cutting out middlemen."

In an opinion piece in the Indian Express, Yashwant Sinha, former finance minister, criticised his own government, particularly Arun Jaitley and NJP chief Amit Shah, for sinking the economy.

In the opinion piece titled "I need to speak up now", Yashwant Sinha also called PM Modi's demonetisation of Rs 500 and Rs 1000 notes an "unmitigated economic disaster". He also said the recently-introduced Goods and Services Tax (GST) was a "badly conceived and poorly implemented" havoc.

Jayant Sinha's editorial was on the lines of the BJP's response yesterday (September 27)in which it rejected Yashwant Sinha's criticism of the state of economy.

The party had said the Indian economy was the fastest growing in the world and some "uncertainty" was bound to occur when "transformative" measures like demonetisation and the GST are taken.

Top party leaders defended the economic situation.  Home Minister Rajnath Singh said the Indian economy is the fastest growing in the world and the country's credibility has been established in the international arena under the Modi government.

"The whole world admits that India is the fastest growing economy in the world. No one should forget this fact. In the matter of economy, in the international arena, India's credibility has been established," he told reporters in reference to Sinha's views.

Senior party leader and Railway Minister Piyush Goyal said the government would not flinch due to some criticism and "stay the course" as it works to transform the economy.

"There is bound to be some uncertainty when some transformative changes are made. It (economy) may take some amount of time to absorb these changes but this will pass. Challenges come but we will stay the course. The government is steadfast in its resolve to end black money and corruption. It won't flinch due to some criticism," he said.