Amid mounting criticism over declining GDP growth in the last quarter, Prime Minister Narendra Modi on Wednesday not only came up with data to restore confidence of people in the economy but also took indirect jibes at the critics. While he dubbed his critics as those suffering from ‘Shalya’ syndrome, Modi also targeted Congress leaders and economists like former Union Finance Minister P Chidambaram and former PM Manmohan Singh, without taking their names.
Modi said some people suffer from the ‘Shalya’ syndrome – derived from a Mahabharata character famous for instilling pessimism and doubts in the mind of warrior Karna in the battlefield. Both Singh and Chidambaram have regularly attacked NDA government’s economic policies. Speaking at an event in New Delhi, Modi reminded the audience of 2013, when India was clubbed among the Fragile Five economies by Morgan Stanley. At that time Singh was the PM.
“Friends, I am not an economist and I have never claimed that I am an economist. But, today when so much is being talked about the economy, I would like to take you to a flashback. There was a time when India was put in a new group, in the context of international economy. And this group, you may think was G7, G8 or G20. No. This group was named as Fragile Five,” Modi said.
“This (Fragile Five) was considered such a dangerous group, whose own economy was a problem, and even the world was thinking that they were becoming a problem in the recovery of world economy. India’s name was also one among them. This means (other countries thought) we won’t be able to do our work properly and even affect the others – for this India was added to the Fragile Five group,” he added.
Though Modi didn’t take the name of Singh and Chidambaram, it was obvious that they were on his firing line. “A man like me who doesn’t know much economics is unable to understand as why this happened when there were so many big economists (ruling the country)? You must be remembering that then inflation growth was higher than the GDP growth and only this was being talked about. Fiscal deficit and growth in Current Account Deficit was being talked about. There used to be headlines over growth of dollar price against rupees. Even interest rate growth was being talked about. All these parameters, taking the country in the opposite direction, were being liked by a few people then,” he said.
The Fragile Five nations included Brazil, India, South Africa, Turkey and Indonesia. In 2013, Morgan Stanley had dubbed the currencies of these countries as ‘Fragile Five’. These were then considered as troubled emerging market currencies and they also had significant Current Account Deficit problem.
The harsh lessons of 2013, however, helped India do a turnaround in 3-4 years. By 2016, India was already out of the Fragile Five list, according to the IMF.