1. Subramanian Swamy says economy is heading for depression, claims warning govt last May

Subramanian Swamy says economy is heading for depression, claims warning govt last May

The Indian economy is heading for a "major depression" and it can "crash" soon if efforts are not put to revive it, BJP leader Subramanian Swamy has said.

By: | Updated: September 18, 2017 7:10 PM
Central Bureau of Investigation, CBI, Innocent unless proven guilty, Subramanian Swamy, BJP veterans, Babri Masjid demolition case, Ayodhya, Uttar Pradesh, BHP, Bhartiya Janata Party The Indian economy is heading for a “major depression” and it can “crash” soon if efforts are not put to revive it, BJP leader Subramanian Swamy has said. (Image: PTI)

The Indian economy is heading for a “major depression” and it can “crash” soon if efforts are not put to revive it, BJP leader Subramanian Swamy has said. The Rajya Sabha MP claimed that a year and half ago, he had written a 16-page letter to Prime Minister Narendra Modi warning him about the economy which is in a “tailspin”.

“Today, the economy is in a tailspin. Yes, it can crash. We need to do a lot of good things to revive the economy. Even a tailspin can be made to steady. If nothing is done, we are heading for a major depression. There will be mass scale… banks might collapse, factories might start closing,” he said in an interview to CNN-News18 recently.

“Last May, I wrote to the Prime Minister a 16-page letter with stats from his own departments to show that there are five storm signals,” he said.

Interestingly, former prime minister Manmohan Singh also hit out at the government once again on the GDP growth, saying hasty implementation of the GST and the withdrawal of 86 per cent of currency during the demonetisation exercise will further affect the GDP numbers.

The GDP for the first quarter (April-June) of financial year 2017-18 slumped to a three-year low at 5.7 per cent, far lower than 7.9 per cent recorded in the same quarter last year.

Subramanian Swamy also claimed that India’s growth rate is much lower than what is being presented. He said, “It is lower than what is being told to you, and it is going to decline, according to what I call Samuelson-Swamy theory of index numbers, which tells you how to calculate the correct index numbers.”

Subramanian Swamy suggested that to support the revival of the economy, it is important to enthuse the public with immediate change, which would be possible by abolishing the income tax. “Whatever you do, the public must see immediate change. I think first thing we should do is abolish the income tax. It’s such an easy thing to do, but they haven’t done it,” he said.

According to Subramanian Swamy, it would give a huge boost to the savings rate; and that would mean the investment cycle would start.

He also suggested the bringing down the interest rates which will get the small and medium industries moving and further start the employment cycle. Along with that he also advocated raising interest rates on fixed deposits.

“You must bring down the interest rates to 9%, and raise the fixed deposit interest rate also to 9% to encourage savings. The rate of interest is an instrument that affects the small and medium industries,” he Subramanian Swamy said.

“The big industries can borrow money abroad also. In the United States, you can borrow for 2%. While here, it being at 12%-18% is very cruel, and much of the damage from it has been to the small and medium industry, which produce bulk of the employment. The employment cycle must start, which can happen only if you get these small and medium industries moving, for which the cost of capital must come down,” he added.

  1. M
    Mihir nandy
    Oct 1, 2017 at 7:09 pm
    Indian private investments were all from bankloans, share market IPO'S, Till now from independence the tata's birla's, singania's, those that initiated business during British time got to expand after independence, with new investors like ambanies, adanies, now 500 other multi millionaires are all the beneficiaries of large growing population indian markets funded from banks pre private bank nationlisation, share market. Till now the amount of public money these private industrialist have acquired are less than what they owe to the banks public parti nts. Now since cheating public money is no more possible for insolvency law in acted by Modiji, cleaning of flush black money in the system by demonetization. They are feeling the burnt are compelled to retract. What is necessary is to confiscate their industries make co operatatve management with the existing board s except replacing the chairmanship to experienced economists within India.
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    1. S
      S B
      Sep 28, 2017 at 11:52 am
      If the lending savings deposit rates are both brought to same level, Then how will Banks manage their expenses plus other liabilities? They may have to learn to survive on other incomes, fees charged for variety of Services. but would that be sufficient? And what happens when a borrower defaults? There will be no buffer to absorb the impact which earlier was provided by the difference between deposit s lending rates. Liquidation of confiscated properties or any other assets of the defaulters in a large number of cases beings lesser amount than what is due to Banks, one solid example being the kingfisher airline's boss Mr.Vijay mallya. In addition to this the huge amount stuck in infrastructure companies, from which the Banks may at the most recover only partial dues upon liquidation.
      Reply
      1. Mohan Ranavde
        Sep 27, 2017 at 9:44 am
        If it is so easy to abolish Income tax as Mr Swamy says , what's stopping the Government? What other weapon does the Government have to intimidate people especially their political adversories? What would the IRS do with it's wings clipped ? In my opinion , the Government can never abolish Income tax .
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        1. J
          Jairaj
          Sep 26, 2017 at 9:02 pm
          Jan dhan aadhar linking were the primers. Followed by Demo GST. All these were introduced at regular intervals. Let the system digest these changes. Rest assured, more reforms are in the pipeline.
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          1. Kisholoy Gupta
            Sep 26, 2017 at 9:13 am
            Please refer my earlier write up on this subject. FD interest rate for must come to 9 .If not never think of winning next election.GDP will never reached to 6.9 flation above 6 ..
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            1. S
              Snehal
              Sep 26, 2017 at 1:33 am
              I agree with Dr. Swamy for immediate action required for economic revival but I don't agree with his suggestion of abolishing Income-tax insted I suggest allowance of all expanditure of any nature made thru banking chenals. And rest should be charged at a flat rate irrespective of kind of income business, ry or to that matter agricultural. Means even ry paid to house help or amount paid for groceries, milk, sabzi, medical, irrespective of amount but thru banking chenals. This will certainly increase rotation of funds and reductions in off the books . And someone's expanditure is someone's income.
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              1. S
                Snehal
                Sep 26, 2017 at 1:36 am
                Please ready "rl" as " ry"
                Reply
                1. S
                  Snehal
                  Sep 26, 2017 at 1:38 am
                  Sorry pl read"ry" as " s a l a r y"
              2. N
                NJ
                Sep 25, 2017 at 9:07 pm
                This government was supposed to abolish Income Tax altogether and move to consumption based tax which is very cheap to administer. After 3 years, they have simply TAXED EVERYTHING. Entrepreneurship and small business spirit is gone with GST. Why anyone would want to file GST returns 30 - 40 times a year and be prosecuted for errors, there is huge compliance cost involved, the GST system is also also non reliable and crashes. It has caused business owners to liquidate their business and invests their proceeds sold at loss to mutual funds and they have sent workers home. When businesses are going to close for fear of complication with GST, it is not good for economy. Importing from China is now cheapter as that country does not have this type of complicated GST system, their companies pay ZERO. This government is wasting too much of public money of HIndi imposition, doing foreign tours, how much ever tax is looted from public is not going to be enough. IT dept should be shut down.
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                1. S
                  Satish Sharma
                  Sep 24, 2017 at 9:13 pm
                  This was to happen sooner or later with the drastic decisions made on following fronts - 1) Demonitisation was a failure, 2) GST implementation was made in a hurry, 3) Changing the RBI Governor hurriedly, 4) Cutting down fixed deposit rates, 5) TDS on FDs, 6) Digitalisation, 7) Not controlling Inflation, 8) Petrol Diesel rates, 9) Business down - small/medium, 10) killing the real estate market, 11) waiving of loans to the farmer and many more things. Just concentrating on infrastructures, railways and supporting Ambanis is not going get the economy up.
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                  1. S.T.CHANDRASEKHAR Babu
                    Sep 24, 2017 at 3:57 pm
                    I, S.T. CHANDRASEKHAR BABU propose/ hypothesize That "The Theory of elements of retrograde “comes into effect, when the process of wealth formation is stable/static with reference to various economic factors like GDP, GNP, Domestic savings, Current account balance ,capital formation /accumulation, international trade reserves, etc., factors of deceleration come into play by unforeseen human actions, inclusive of causative factors effecting the economic process/natural calamities such as riots, floods, droughts etc., where in the wealth formation process is subjected to retrograde motion and human calamities take place. This I hypothesised way back in 2015 or so and the present state of economy is an indication of this.
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                      N. Chockalingam
                      Sep 24, 2017 at 2:33 pm
                      What Mr.Subramaniam Swamy says seems to be correct. As a common man, we are able to realise that the income earning capacity of majority of the people has gone down. Money circulation has gone down and it has seriously affected the survival of hundreds of thousands of lower level people. Government having got the capability of implementing whatever they want, it should take the right steps for the immediate and tangible development of our economy. Otherwise, God only has to save our nation and common people.
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                        V K Agarwal
                        Sep 24, 2017 at 1:14 pm
                        Depression projection of Subhramaniam Swami is not taken note by any ministirial colleague and he should give a review as sufficient time has passed from initiating the study in public domain. Improved and detailed statement may create interest after understanding the philosophy. He needs to amend the line of thinking and explain the things in detail difficult statement after analysing the mind set. Alternatively, he should raise the issue in parliament as a members bill for proper appreciation by full house consisting of members from different parties and following different policies.
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                        1. R
                          Rakesh Vasavada
                          Sep 24, 2017 at 10:25 am
                          As far as Swami ji is concern, he is looking right as per present situation, Modiji must take some step to boost unemployment problem, daily increase rate of petrol and diesel. Increase rate of daily need product. In 3 years of your government we people can say Mr. Arun Jetly ji is not up to the mark.
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                          1. S
                            Suresh chandra
                            Sep 23, 2017 at 10:16 pm
                            Mr Swamy is quite right.WE have taken our F.Ds away from banks for avoiding the liability of T.D.S income Tax. It has become a headache for poor middle class and retd peopleliving in simpilicity.On the other hand who are living in baglows of so many crores they are immune from I.T.
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                            1. S
                              Shweta
                              Sep 23, 2017 at 10:14 pm
                              I am big fan of subramaniam swamy..No matter how much people criticised him...I believe he makes sense and have a good understanding of politics and economy.. Govement has to take immediate actions to revive the economy...Because of cumbersome process of GST it's small and medium level businesses are suffering ..There is a negative feeling in the market..And before it's becomes top big govt should take adequate measures..
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                              1. R
                                rohan
                                Sep 23, 2017 at 9:48 pm
                                The cat is out of the bag
                                Reply
                                1. Faku Faking
                                  Sep 24, 2017 at 2:47 pm
                                  NOW THE CAT FIGHT WILL START.
                                  Reply
                                2. K
                                  Kamlesh
                                  Sep 23, 2017 at 9:41 pm
                                  If good governance is the heart and soul of a govt,its economy is the pulse the back bone and the respiratory system. Modi govt. should significantly reduce the prices of fuel . State govt. should be denied their share of GST if they do not do so. Now GST has opened the flood gates of revenue for the govt. since its revenue will multiply manifolds. It should come into action immedietely since low fuel costs can boost our global compe ivness and make goods and services affordable for all. Stimulus packages will only help in certain sectors, and if misdistributed will again create problems. ITS NOW OR NEVER. Hope to see the people voting for the honest in the next election.
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                                    vicky
                                    Sep 23, 2017 at 8:11 pm
                                    yes the indian economy is going backward if there is no corrective action is taken towards its revival. as country is withneshing slow movement of money specially after implemetation of GST. the goverment should clear its stand on gst because the rules are harsh to undersand a lay man more complex more diffculty the rule are compicated.. even the businessman are more focused toward gst rather than there own business.
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                                    1. K
                                      Kasturi
                                      Sep 25, 2017 at 5:46 pm
                                      If Subramanian swamy is made the Finance minister, everything will set right. An Intellectual is kept aside.
                                      Reply
                                    2. Palni Ramlingam
                                      Sep 23, 2017 at 6:59 pm
                                      Mr. Subramanian swamy is not a constructive politician, but not a corrupt politician too. His views on following Chinese economy is stunning. And our banks r fleecing the loan takers by 2-18℅ is note worthy. Savings bank interest should be drastically cut to move our people towards other types of investment. And GST is nailing business/ industrial sector to a point of no return. Massive IT raids r needed to bring out the corrupt money of politician, beurocrat, film stars, core sector dealers. IT should be cut to make it people friendly. And finally right people the right place.
                                      Reply
                                      1. Surinder Jindal
                                        Sep 23, 2017 at 3:26 pm
                                        I agree with Dr. Swamy's view. I am a big fan of Dr Swamy. I am a lay man but I am of the view that if income tax is abolished, there will be no black money, because people resort to such practices which creat black money to avoid income tax only. If there is no income tax people will transact honestly and it will lead to digital Bharat also. I am also of the view that there should not be any currency note more than 100 rupee note.
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                                        1. K
                                          Kalyan
                                          Sep 23, 2017 at 3:20 pm
                                          Mr Swami is one of the culprits for the debacle. He instead of advising what to be done should advise whom to appoint as an expert to guide the economy into proper track. We had enough of experiments.
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                                          1. S
                                            S.K suri
                                            Sep 23, 2017 at 2:02 pm
                                            Gst is disastrous for the Indian economy..The officers responsible for making complicated rules ,regulations and undigestive system should be sacked.Make GST SARAL. Make only one return in three months instead of four returns in one month.. Do not make a middle class trader and or an industrialist angry who has always been backbone of B.J.P. The middle class has tremendous power to make or over through...
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