24/12/2018 2:12 PM IST

Modi Govt, BJP Will See 'Acche Din', New India Slogans Recoil In 2019: Yashwant Sinha

GST is a 'mess' and 2014's 'historic mandate' has been wasted, says former finance minister Yashwant Sinha in an interview.

Hindustan Times via Getty Images
Yashwant Sinha in a file photo.  

In the run up to the historic 2014 Lok Sabha election, former finance minister and ex-Bharatiya Janata Party (BJP) veteran Yashwant Sinha thought Narendra Modi was the BJP’s best bet to return to power. However, he says he also thought that the famed ‘Gujarat Model’—which he says is all about one man’s “control over government and institutions”―would not work at the national level and that the former Gujarat CM would have to work differently at the centre.

Four years later, in 2018, speaking with HuffPost India about his new book India Unmade, Sinha conceded that he was wrong and that the mandate of 2014 was “wasted”. The economy, the former FM said, has been “sluggish” for the past four-and-a-half years, and therefore new jobs are not being created. The outspoken critic of the Modi government, who resigned from the party in April, also called the government’s flagship Goods and Services Tax (GST) a “mess”, calling it “Gayi Sarkar Teri Taxation”.

In the run up to the 2019 election, said Sinha, all the ruling party’s slogans such as New India, Acche Din and others will “recoil on the government”. But is there an alternative? When asked for his opinion on Congress president Rahul Gandhi, Sinha refused to answer the question. 

Edited excerpts:

Why do you regret endorsing Modi’s candidature for the post of prime minister in 2014?

Because he has not proved true to the mandate which he received in 2014. You know, that massive mandate that the people of India gave, should have been used for their welfare, should not have been allowed to go waste. Which is what has happened in the last four-and-a-half years. And that is my major disappointment; that a historic mandate has been wasted.

In the book, you write, “I waited for forty months before I opened my mouth and once I did there was no turning back.” Why did you wait so long and what was the trigger for you to change your mind and speak up?

I waited because I thought at some point of time, the government will start doing the right things but then came demonetisation in November 2016 which I considered to be very, very ill advised but even then I kept my cool. I did not rush to criticise it until the damage that it was doing to the economy became palpable. And when I wrote that piece in The Indian Express in September 2017, by then the ill effects of demonetisation had become quite obvious, and the further disappointment was that the Prime Minister and his government were bent upon misleading people by dishing out wrong facts and wrong interpretation about the economy in general.

There is a section which holds that, during the campaign in 2013-14, senior BJP and RSS leaders believed that Modi was a good instrument to bring back the Sangh Parivar to power and then implement its agenda. But that effort seems to have been taken over by an individual. Do you agree with this assessment?

I agree with the assessment that in the run up to 2014, Modi was our best bet and I said as much before the election. I also believed that if we succeeded in making the elections presidential in nature―that ‘we have Modi, who do you have?’― the question which is being asked in context of 2019 also, then we will have a very good chance of winning. And I wanted the party to win not for the purposes of implementing the Hindutva agenda, but for generally doing good for the people of this country like we have tried to do under (Atal Bihari) Vajpayee’s Prime Ministership. I had hoped that that is the line that this government will also follow. And we will utilise the mandate for their (people’s) well-being. But we came to a point… it became evident that was not happening. Then I decided to speak up.

In the book you also say that the “country was in the solid grip of a couple of individuals whose sole objective was the pursuit of power”.  Who are these individuals and what made you write this?

Those two individuals clearly, as has emerged over a period of time, are the Prime Minister (Narendra Modi) and the Party President (Amit Shah). They are an old team from Gujarat who are now controlling national affairs and there is enough evidence to suggest that institutions like cabinet, civil service, parliament, judiciary… the way he (Modi) has acted in tandem with party president Amit Shah, it has become quite clear that the Gujarat Model is a model of control over the government and other institutions. They are in complete control of government and whichever institution is prepared to surrender to them.

There were critics who said similar things in 2013 and 2014 about their term in Gujarat. Did you not see this trend then? 

I was convinced that the Gujarat model will not work at the national level. But I was mistaken because I have been proved wrong.

If you were convinced of this, then why support him?

That’s why I said that, they could not work on the basis of the Gujarat Model, it will be a different model. That was my conviction at that point of time.

But now you see it differently.


Whatever they might say about the growth rate, (economy) has been sluggish for the last four years and that’s why jobs have not been created. And that is why the youths of this country have become so desperate.

Coming back to the book. In the chapter about jobs, you say that, “in statistical terms, employment has stagnated” while 1 crore Indians reach an employable age every year. Would you say that that is your assessment about employment generation in India during the last four years?

Yes. Look, the jobs situation is abysmal because the economy is in a bad shape. If the economy was doing as good as the government claims it is doing, then clearly there would be jobs. Under Mr. Vajpayee, he had promised creation of 1 lakh job opportunities for the youth. We ended up doing that through various schemes that we started. Now it is not happening.

Why is it not happening?

Economy is slowing. Whatever they might say about the growth rate, (economy) has been sluggish for the last four years and that’s why jobs have not been created. And that is why the youths of this country have become so desperate.

There is another chapter in the book, perhaps cheekily titled, Pradhan Mantri Attention Deficit Disorder Yojana. Could you describe, in a few words, why you named it that way and what you are trying to imply?

Simple. See, ever since 1998, when Mr. Vajpayee was the Prime Minister, I was the Finance Minister, and Jaswant Singh became the Deputy Chairperson of the Planning Commission, we started a policy of reducing the number of central government schemes which we were imposing on the states. So we went on reducing schemes (steadily). Jaswant Singh, when he became Finance Minister, carried on with this trend. During the ten years of UPA, again, whoever was the Finance Minister, carried on with this trend of reducing the schemes financed by the central government. I, as Chairman of Standing Committee on Finance, in the last Lok Sabha submitted a report to Parliament in which the committee said that the central schemes (should be) 10 or 12 and should be financed 100% by the Government Of India. And we listed out what those schemes could be.

Now that whole trend has been given a go by. The reform has been undone. We have mounted an assault on the federal structure of this country by starting 97 schemes named after the Prime Minister, which will find mention in the book.

Are you saying that, because of these many schemes, there is an attention deficit towards the schemes?

The schemes are not being properly funded. They have remained largely on paper. That is the attention deficit.

Coming to the chapter about GST, in which you have coined a new full form for the policy calling it ‘Gayi Sarkar Teri Taxation’, could you explain why you say so?

I have been a great votary of the Goods and Services Tax. I worked hard in the Finance Committee to ensure that we gave the report in favour of GST, which we did, and I myself have carried out significant reforms in the area of indirect taxes when I was Finance Minister and introduced CENVAT, which had three rates of 8%, 16%, 24%―merit, mean and demerit. I thought that I had cleaned up the mess on the indirect taxes side. And ultimately we will move to a single rate; move to GST and a single rate. That was my hope.

Now, the constitutional amendment which came to the standing committee on finance, it was not talking about rates, it was only talking about the powers of the state government and the central government of India, in order to be able to introduce GST. So we did not have the opportunity to comment on the rates. Then, because it remained pending, also let me tell you that the Government of Gujarat was opposing GST, at that point of time, as was the BJP government of Madhya Pradesh―then this government came and they started working on GST. Finally, the GST which was introduced at the midnight of 31st July, 2017, was a mess. Because three rates went to five rates then there were all kinds of cesses. Then the procedures were made so complicated that, you know, there was a great deal of suffering especially for the MSME sector. Now, it need not have been so because, as I said, there was a history to reform, in the indirect taxes side. And if the Finance Minister of India had led a committee of state finance ministers from the front, they would have settled for three rates as Arvind Subramaniam has suggested. And gone for much simpler procedures, which would have made life simpler for all those who paid these taxes.

NARINDER NANU via Getty Images
Sinha says GST procedures were made so complicated that there was a great deal of suffering, especially for the MSME sector.

You have titled the chapter about NPAs as ‘clogging the nation’s arteries’. Could you elaborate on this point?

Because they did not attend to the NPA problem or the banking sector as a whole, in the manner in which they should have looked after it. In 2014, when the present Finance Minister, he presented the Economic Survey to parliament, the figure of NPAs mentioned as on 31st March 2014 was Rs 2.04 lakh crore. Now he is saying that it was actually Rs 8.5 lakh crore. He has not made that statement in Parliament. He has been telling that to the media. And the manner in which—I have nothing against the Bankruptcy Code—but the whole lot of other steps which should have been taken, they have not been taken. And the earlier example of how we tackled the problem of NPAs when we had come to office in 1998, that has all been forgotten and, you know, they are only making examples here and there but they are not been seriously tackling, in a systematic manner, the problem of NPAs as a result of which, NPAs have kept on increasing. Now, in a healthy economy, NPAs should decline, not increase. Isn’t it? Is it sufficient to say that it was the loans given by the UPA government? What if, five or ten years later, the loans which have been given now turn into NPAs? Governance is a continuous process.

So, do you think that the New India slogan will be the India Shining of 2019?

All their slogans—Acche Din, New India, Co-operative Federalism, Team India, Sab Ka Saath Sabka Vikas—all this is going to recoil on the government.

One last question, sir, what is your opinion about Rahul Gandhi?

I will not answer that question because I don’t believe in personalised politics. My point is that even now, today, I would say Modi is not the issue. Issues are issue.

So do you agree with the Congress party’s policy plank for the 2019 election that seems to be emerging?

No. I don’t. I have no idea of that. I can’t comment on it.