Accusing Prime Minister Narendra Modi of systematic “bludgeoning” of micro, small and medium enterprises (MSMEs) and informal businesses, Congress leader Jairam Ramesh on Wednesday alleged the policies of his government proved an economic “catastrophe” for the country.

He claimed that the 140 crore population of the country is paying a heavy price for the PM’s “arbitrary policymaking” in the form of its economic consequences.

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Citing a new report by India Ratings, Ramesh, who is the Congress General Secretary in charge of Communications, said the credit ratings firm vindicated Congress’ apprehension. The report “has confirmed what the Congress has repeatedly warned, the non-biological PM’s systematic bludgeoning of India’s MSMEs and informal businesses has been an economic catastrophe”, he added.

He said, “Three shocks in particular have been devastating for the country. The first was the PM’s surprise announcement of demonetisation on 8th November 2016 which virtually halted all economic activity for the following months that brought no clear economic or social benefits. Second was the botched roll-out of the GST in July 2017 with a convoluted tax structure, high compliance burden, and punitive enforcement. The third was his decision to impose a nationwide Covid-19 lockdown on 24th March 2020 without prior notice, adequate preparation, or an economic programme to protect the informal sector.”

The India Ratings has come up with figures to gauge the devastating effects of these three shocks (demonetisation, GST, and lockdown). According to its report, the Unorganised sector that contributed 44+ per cent to India’s Gross Value Added (GVA) and grew at 7.4 per cent Compound Annual Growth Rate (CAGR) between FY11 and FY16 suffered an average yearly contraction of 0.2 per cent since then.

“By FY23, GVA by unincorporated businesses was 1.6 per cent below FY16 levels. This recession in the unorganised sector cost India 4.3 per cent of its GDP or Rs 1.3 lakh crore. Sixty-three lakh informal enterprises shut down due to these three shocks leading to the loss of 1.6 crore jobs. At a time when a record number of youths is entering the labour market, the Modi Government was destroying jobs,” he alleged.

On the ‘Make in India’ initiative of the government, Ramesh said, “For all the hype and bluster of Make in India manufacturing jobs reduced to 3.06 crore in FY23 from 3.6 crore in FY16. The non-biological PM oversaw the destruction of India’s manufacturing which is India’s ticket to solving unemployment problem and sustaining middle-income status.”

He concluded by saying, “140 crore Indians are now paying the price for the economic consequences of the non-biological prime minister’s cronyism, arbitrary policymaking, and refusal to engage constructively on issues.”