Thaindian News

Kolkata, June 1 (IANS) The Communist Party of India-Marxist (CPI-M) Monday conceded that the country’s annual growth rate of 6.7 percent has raised hope but cautioned that it did not indicate the Indian economy was strong.
“The (United Progressive Alliance) government had repeatedly said that the economic growth will be 7.1 percent. Prime Minister Manmohan Singh, and the finance minister had also said that the growth figure will be 7 percent. But in reality the figure is 6.7 percent. Without doubt it has raised hope,” the party’s Bengali mouthpiece Ganashakti said in an editorial Monday.

“At a time when the growth rates are at a historic low due to the global meltdown, the figure for the Indian economy may appear to indicate that the economic condition is good,” it said.

The daily said that an in-depth study reveals that while the growth rate was 7.75 percent during the first six months of the year but it dropped to 5.8 percent in the second half of the year after the recession set it.

“This shows that the crisis has impacted the growth to a considerable extent,” the editorial said.

The paper also claimed that the non-government sector could not be given the credit for the growth rate, despite the government giving prime importance to the private sector by implementing a liberalisation agenda.

The pay hike of the government employees, huge state spending during the Lok Sabha elections and the three stimulus packages announced to combat the recession have acted as a trigger for growth, it said.

“In this way, government and government spending have been the driving force of the economy in the last fiscal. It is for this reason that the crisis did not affect growth,” the paper said.

On the other hand, the government’s increased expenditure in a desperate attempt to hike the growth rate has raised the revenue deficit.

“The government has only opened its purse to help the industrialists, but made no effort to collect taxes from the rich. In other words, the government has been firing from the shoulders of the common people to earn kudos for the economic growth by overlooking the abject failure and helplessness of the private sector,” the paper said.

“It is shameful (on the part of the central government) to claim this as success,” it said.

In another editorial Sunday, the daily alleged that the second UPA government’s policy of economic liberalisation, disinvestment and plans to decontrol petrol-diesel prices will burden the common man.

“Manmohan Singh and other leading lights of the UPA are describing the Lok Sabha election victory as a verdict for economic reforms. They feel as the last government was dependent on the support of the leftists, reforms had taken the backseat. So they are trying to raise a reform blitz”.

“Their aim is to raise growth by reducing people’s income and burden them with taxes. This will only benefit the rich,” the paper said.