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PC uncages B-I-G beast
Brawl over Modi’s business buddies

New Delhi, March 31: Enter, the B-I-G B. Neither angry nor young, this Big B is “chummy” and is a crony.

Finance minister P. Chidambaram today bluntly accused a section of business of turning into ardent supporters of Narendra Modi’s brand of crony capitalism, marking an explosive turn to Campaign 2014.

Economics made high-decibel entry into the political landscape after Chidambaram sought to repulse a blistering attack from the BJP on the UPA-II’s economic scorecard.

Smarting under a fusillade from the NDA government’s former finance minister Yashwant Sinha, Chidambaram said: “Big business which likes the idea of crony capitalism is with the BJP. Business as such is comfortable with us, with Manmohan Singh. But Big Business. I said with capital B, now I can add capital I, capital G.”

To another question on industry, Chidambaram added: “Only a section of the business is very chummy with Modi because his brand of liberalism is crony capitalism.”

He refused to name anyone.

The Ambanis and Ratan Tata are among those who have in the past spoken glowingly of Modi’s ability to fast-track approvals in his state.

The slugfest was triggered by Sinha’s questions to Chidambaram over the weekend but realisation was already dawning on the Congress that its thrust on “tolerance” was losing bite and it needed to roll out the big guns and address questions on the economy.

Chidambaram, Modi

Sinha had charged the finance minister with having wrecked a robust economy not once but twice — the first time during the United Front regime in 1997-98 and again during the last three years of UPA-II.

Sinha had said Chidambaram had taken the economic growth rate down to 4.5 per cent in 1997-98 and was close to replicating it this year. He labelled Chidambaram a habitual spoiler “who specialises in a sub-5 per cent growth rate”.

Terming Sinha’s remarks as puerile, Chidambaram told reporters at the Congress headquarters: “The two years that recorded the worst growth rates were 2000 and 2002. The finance minister of that time, Yashwant Sinha, is now a distant memory and I hope he remains where he is, a distant memory.”

“The economy is far more stable now than it was 20 months ago… we have shrunk the current account deficit (the gap between foreign exchange earnings and payments for goods and services) and added substantially to the foreign exchange reserves which have now crossed $300 billion,” Chidambaram said.

One of the key elements in the rancorous debate was the UPA’s job creation record. The Congress manifesto has promised to create 10 crore jobs in the next five years.

The Congress claim has drawn derisive comments from the BJP with Sinha pointing out that the NDA government had created 6 crore jobs between 1999 and 2004 while the UPA government had been able to generate just 1.5 crore jobs in the eight years between 2004 and 2012.

Chidambaram did not contest the job statistics but suggested that the unemployment rate during the UPA regime had gone down to 5.1 per cent from over 8 per cent during the NDA stint.

This ignited a fresh storm with BJP spokesperson Ravi Shankar Prasad contesting Chidambaram’s claims.

“This is outlandish. I cannot understand how you can agree that you have created fewer jobs and yet argue that you have brought unemployment down,” Prasad said.

Chidambaram was relying on how a job market changes when the economy starts to slow down. People stop looking for jobs, and either start their own businesses or pursue higher studies. When that happens, the number of job seekers registered with employment bureaus across the country start to fall, creating the statistical paradox.

This is happening in the US where the economy is not generating new jobs at a fast pace. Still, the unemployment rate in the US has dipped to 6.7 per cent in February from 9 per cent in September 2011 as more people prefer to stay home and on the dole rather than go out and look for jobs.

Prasad blasted the Congress and Chidambaram for trying to insinuate that Modi had fashioned his own style of crony capitalism. “The Congress and Chidambaram are the biggest patrons of crony capitalism,” he said, drawing attention to the allegations of multiple scams.

The recriminations over crony capitalism nudged the debate towards black money. Chidambaram said he had aggressively pushed for the release of data from Swiss banks relating to Indian nationals.

But the Swiss finance minister, Eveline Widmer Schlumpf, had been stonewalling the request on the ground that India was seeking information on the basis of stolen data. “I haven’t stolen the data. We got it from the French government,” Chidambaram said.

He said he had asked Schlumpf how the Swiss government was sharing information with the US government while denying India information.

A white paper on black money brought out by the finance ministry in May 2012 said the Swiss government had confirmed to authorities here that Indian nationals have about $2 billion stashed away in Swiss bank accounts.

The sparring on crony capitalism could lead to some disclosures. “In the next couple of weeks, we will release some information about Swiss bank account holders who have been assessed and who have been taxed,” Chidambaram said.

However, officials said the data that had been accessed from France did not contain the names of big business houses. “These are mostly small fry,” an official said.

Helpless on Bengal

Chidambaram explained why the Centre could not grant Bengal a moratorium on interest payments.

Chidambaram said: “My predecessor Pranab Mukherjee did extend a financial package to Bengal under the BRGF (Backward Regions Grant Fund) which continued after I took over. What Bengal wanted was moratorium on debt repayment, which means the interest on debt to be borne by the Centre.

“There is no provision in the budget, there is no scheme under which the Centre would have paid interest for Bengal. And if one state is given this, other debt-ridden states like Punjab and Kerala, too, would have demanded the same. How can the Centre do this?”


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