PM Modi says economy under 'economist prime minister' left him shocked

Hitting out at the Congress-led UPA for its 'dismal management of the Indian economy' under an 'economist' prime minister and a 'know-it-all' finance minister, Prime Minister Narendra Modi said that the details about the decay in the Indian economy were unbelievable and it had the potential to cause a crisis all over.

In an interview to Swarajya magazine, PM Modi said, "We all knew that the economy was in the doldrums but since we were not in government, we naturally did not have the complete details of the state of the economy. But, what we saw when we formed the government left us shocked!"

"The state of the economy was much worse than expected. Things were terrible. Even the budget figures were suspicious," the Prime Minister added.

PM Modi's statement comes on the first anniversary of implementation of India's biggest tax reform, the Goods and Service Tax (GST). Prime Minister also said that Mercedes car and milk cannot be taxed at the same rate and accepting Congress party' demand for a uniform 18 per cent rate would lead to a spike in food and essential items' taxation.

"In 2014, industry was leaving India. India was in the Fragile Five. Experts believed that the 'I' in BRICS would collapse. Public sentiment was that of disappointment and pessimism. Now, in the midst of this, imagine a White Paper coming out giving intricate details of the extent of damage. Instead of being a mollifier, it would be a multiplier of the distress," PM Modi said when he was asked why BJP didn't bring a white paper on the state of Indian economy.

"Playing politics on the state of the economy in 2014, would have been extremely simple as well as politically advantageous for us. We had just won a historic election, so obviously the frenzy was at a different level. The Congress Party and their allies were in big trouble. Even for the media, it would have made news for months on end," he added.

On Banks

Speaking on the state of public sector banks which are struggling with bad loans, PM Modi said, "We had identified the problem with banks in 2014 itself. A retreat of bankers was held in Pune where top-most officials attended. I told them to go about their work with utmost professionalism and clean the sector. I assured them that the long-standing culture of phone calls from Delhi influencing their working is not the way our government works. This is what enabled the true state of affairs to come out."

Hinting at Congress-led UPA government's involvement for the rise in banks' NPAs, PM Modi said: "Earlier, If someone owed Rs 500 crore and when it was time to repay that loan, a phone call from Delhi would ensure another loan of Rs 500 crore is given so that the previous loan was repaid. This cycle persisted. We stopped this. This is why the old loans had to be shown as NPAs."

On Air India

While speaking on failed disinvestment of Air India, the Prime Minister said, "At the cabinet level, we have cleared the sale of not only Air India but several other (loss-making) public sector units - this itself is a historical in many ways; that they are yet to be sold is the result of timing and process."

Defending the terms set out by his government's on Air India stake sale, PM said, "We don't want to make a sale where we will be accused of selling something for X amount when we could have got more. But the policy decisions for strategic sales have already been taken."