Rahul Gandhi at Berkeley: Criticises PM Modi's economic policies

Congress vice president Rahul Gandhi today criticised Prime Minister Narendra Modi's economic policies, accusing him of causing "tremendous damage" to India's economy with "reckless and dangerous" decisions like demonetisation and "hastily-applied" GST. Gandhi, 47, who arrived in the US yesterday on a two-week-long tour, addressed students at the University of California, Berkeley, to reflect on contemporary India and the path forward for the world's largest democracy. He said the November 8 demonetisation decision was taken without asking the Chief Economic Advisor and Parliament, which caused tremendous damage to the economy. Demonetisation, he alleged, imposed a devastating cost on India.

"Ignoring India's tremendous institutional knowledge and taking such decisions is reckless and dangerous," he charged. He said 30,000 new youngsters were joining the job market every single day and the government was only creating 500 jobs a day. "This does not include the massive pool of already employed youngsters," he said. "The decline in economic growth today is leading to an upsurge of anger in the country. The government's economic policies demonetisation and hastily-applied GST have caused tremendous damage," he alleged. Goods and Services Tax, a tax regime which combines all of India's states and union territories into a single market, was launched at midnight on June 30.

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Gandhi also accused the government of wiping out millions by demonetisation. "Millions of small businesses were simply wiped out as a result of the demonetisation, farmers and many who use cash were hit extremely hard. Agriculture is in deep distress and farmers suicides have skyrocketed across the country." Finance Minister Arun Jaitley, however, had said the fallout of demonetisation was on predicted lines and the economy will benefit in medium and long term. Jaitley's remarks came after the Reserve Bank of India said that 99 per cent of the demonetised currency came back into the system. Jaitley had also insisted that money getting deposited in banks does not mean that all of it is legitimate. But Gandhi described demonetisation "a completely self-inflicted wound" that caused approximately 2 per cent loss of the GDP.

India, the Congress leader said, cannot afford to grow and create jobs at the current rate. "If we continue at the current rate, if India cannot give the millions of people entering the job market employment, anger will increase and it has the potential to derail what has been built so far. That would be catastrophic for India and the world beyond," Gandhi warned. The Congress vice president said that the central challenge for the country today is creating jobs. Noting that roughly 12 million young people join the Indian job market every year with nearly 90 per cent of them having a high school education or less, Gandhi said India, being a democratic country, cannot follow the Chinese model of coercion.

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"Unlike China it has to create jobs in a democratic environment," he said, adding that India does not "want China's coercive" instruments. "We cannot follow the model of massive factories controlled by a few," Gandhi said. Jobs in India, he said, are going to come in from small and medium scale industry. India, he asserted, needs to turn colossal numbers of small and medium businesses into international companies. Alleging that currently all the attention in India is being paid to the top hundred companies, he said: "Everything is geared towards them, the banking systems are monopolised by them and the doors of government are always open to them."

"And laws are shaped by them," he said, adding that entrepreneurs running small and medium businesses are struggling to get bank loans. "They have no protection and no support. Small and medium businesses are the bedrock of India and the world's innovation. Big businesses can easily manage the unpredictability of India. They are protected by their deep deep pockets and connections," he said. India, he said, has triggered a massive process of human transformation. The momentum is so powerful that India's failure is no longer an option, he said, "Our success impacts the world," Gandhi said, warning that this momentum can be destroyed by "hatred, anger and violence". "The politics of polarisation has raised its ugly head in India," he said, adding that liberal journalists are being shot.

He was apparently referring to rights activist and journalist Gauri Lankesh's killing. "People being lynched because they are Dalit," he alleged. "Muslims were killed on suspicion of eating beef. This is new in India and damages India very badly." He said the politics of hate divided and polarised India and was making millions of people feel that they have no future in their own country. "In today's connected world this is extremely dangerous," he said.

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Gandhi at the same time also acknowledged that Prime Minister Narendra Modi is a better communicator than him. "I'm an opposition leader. But Mr Modi is also my prime minister. Mr Modi has certain skills. He's a very good communicator. Probably much better than me. He understands how to give a message to three or four different groups in a crowd. So his messaging abilities very subtle and very effective," Gandhi said.
He was responding to a question on what does he think about Modi as the prime minister. "What I sense is that he doesn't converse with the people he works with. Even members of Parliament of the BJP come to me and tell me that 'sunte nahi hain' (he does not listen to us)," Gandhi added.

He said Modi must speak to the people who work with him. "I mean there is a lot of information that the opposition for example has. He is not really interested in that input. So that is what has been going on," he said. Gandhi described Modi's flagship policies like 'Make in India' and 'Swachh Bharat' as a good idea. "On what they have done well? What I like? I like the concept of 'Make in India'. But the orientation of 'Make in India' is slightly different than what I would. So, the orientation of Make in India is big business and a lot of it is defence.My orientation of 'Make in India' would be small and medium businesses," he said.

Gandhi said he would like to carve out space for small and medium businesses and bring in experts from Silicon Valley and take these small and medium businesses and transforming them into global companies. "Swachh Bharat is something that Mr Modi likes. The idea of hygiene I think is a good one. And I think I think the sort of stuff that they are doing on open defecation is not a bad thing," Gandhi said. The Congress vice president said the impression that he was a reluctant politician was a result of the campaign against him by the other political camp. "There is a BJP machine about a thousand guys sitting on computers that basically tell you about me," he said as the audience burst into laughter. "They tell you, I am reluctant, I'm stupid. They tell you all these things," he said amidst another round of laughter and applause.

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"All they do is spread abuse about it. And the operation is basically run by the gentleman who is running our country," Gandhi said. Responding to a question, Gandhi said the country needs political reform. "Administrative reform is important. But much more important than administrative report is actually political reform. Today, the real problem in India is that our political machine.. they are not empowered the way they should be... The laws in India are made by the ministers and five or six people surrounding the minister. "And until you make that process transparent and out into the open, you are not really going to transform the system," he said.

He said the lawmakers who should be formulating policies are today more worried about building roads."Today our MPs don't make laws. They are worried about building roads in villages. And they get punished for not building roads in villages. They should be making laws. They should be empowered to make laws. That's their job. And that is the fundamental thing that has this gone wrong in India," he said.