Union Finance Minister Nirmala Sitharaman on Monday responded to the critical observations of the economy made by her husband and economist Parakala Prabhakar, who said the Bharatiya Janata Party (BJP) should embrace the P V Narasimha Rao-Manmohan Singh economic model to boost the flagging economy. Both the former Congress Prime Ministers are regarded as pillars of economic reforms in the modern Indian economy, Prabhakar said.
In her response, Nirmala said that all the key reforms such as Goods and Services Tax (GST), Insolvency and Bankruptcy Code (IBC) and Aadhaar have taken place in the last five years.
In an article in a news daily, Prabhakar suggested that the BJP had not been able to propose any economic framework of its own.
In a no-holds-barred attack on the Modi government, Prabhakar alleged, "In economic policy, the party mainly adopted "Neti Neti (Not this, Not this), without articulating what was its own Niti (policy)'."
Post a bankers' meet on credit offtake and NBFCs, Sitharaman was asked to comment on her husband's take on the economy.
"All the reforms have taken place between 2014 and 2019 (during the NDA rule) and the deep reforms like the GST were not introduced by the Congress. IBC and Aadhaar were introduced and amendments were carried out. The Ujjawala scheme benefitted 8 lakh women. Many changes were made to tax structure. After October 1, startups will now have to pay the lowest tax in India. All these should have also been praised," Sitharaman said.
The spouse of the sitting Finance Minister advised the Narendra Modi government to "embrace" his predecessors -- former Prime Ministers Manmohan Singh and P.V. Narasimha Rao's economic model. Prabhakar is himself an economist. He comes from a political family himself and both his parents were legislators in the Andhra Pradesh Assembly.
A former communications adviser to the government of Andhra Pradesh who is close to Telugu Desam Party (TDP) chief Chandrababu Naidu, Prabhakar also criticised the ruling party for attacking the Nehruvian economic framework, saying that the party think-tank "fails to realise" that the attack remains more of a political assault and can never graduate to an economic critique.
"The path-breaking repositioning ushered in by P.V. Narasimha Rao and his economic amanuensis Manmohan Singh remains unchallenged even today. Almost every political party that formed the government, took part in governance, or lent outside support to the government at the Centre since then embraced that repositioning. The Rao-Singh policy scaffolding remained largely unaltered in the last quarter century," Prabhakar wrote.
In fact, Prabhakar asking to return to Rao's model of economy shouldn't be surprising, considering that his family was closely associated with the late former Prime Minister.