Thread by @gajamani

P Chidu said in an interview this week that he wishes someone with knowledge of economics was around in this government to make sound decisions. That is SOME arrogance from a lawyer who pretends to be an economist. Lets re-cap his voodoo/scorched earth economics from UPA2 era../1

Chidu not only goofed up the entire economy by his voodoo economics and accounting principles, but he also followed a scorched earth policy to make sure Modi is booby trapped, when they come to power in 2014. He knew the writing on the wall & did it. Lets recap what he did ../2

1) He cleverly moved the fuel subsidy of 35000 Cr from Q4/2013-14 to next year.
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2) He announced Food Security Bill budget of 115,000 Cr and said it will be rolled over to the next year.
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3) He opened the Ghost of 7th Pay commission & left unlimited liability to new govt. ../3

4) He preemptively announced 1-rank-1-Pension but made it prospective only from 01/04/2014.
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5) He announced hike in MNREGA wages to 135 Rs but made no budget provision.
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6) He left claims of Fertiliser subsidy of 4000 Cr unsettled with PSUs, as loan with 6% interest ../4

7) He milked Coal India & other PSUs to the tune of 20,000 Cr (to govt) & 3Bn (total) as interim dividend. He left them with 0 capex for expansion
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8) He made no provisions for #RTE in central budget. States were left to find money to reimburse pvt. schools for 25% quota ../5

9) He talked big, but GST couldn't take off bcos centre had no money to pay the 20,000 Cr demanded as bare minimum compensation by the states
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10) LIC was made to fork out 5.6% stake in 42 loss making PSUs. Forced to invest 150 Bn in ONGC, 40,000 Cr in 2013 to buy dead PSUs ../6

11) Except NTPC & NMDC, all other divestment targets of UPA were achieved by making LIC buy >50% shares at premium
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12) An estimate of 50,000 Cr was spent on Aadhar while Chidu was backing NPR. It was a open turf-war with no clear vision on end game. Modi recovered this mess ./7

13) Chidu transferred end-use decision rights of 3.4 Lakh Cr from Centre to the states, leaving only pittance to new govt for determining where to spend. It was a smart booby trapping of new govt to prevent them from doing anything productive. timesofindia.indiatimes.com/business/india…
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14) UPA2 obfuscated costs of FSB in such manner that, it was totally unclear who was going to foot the bill. It promised the right to food to citizens, but who pays? If implemented in spirit, it would cost 5% of all money supply in India then. in.news.yahoo.com/six-myths-abou…
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15) Oil subsidies were a white elephant. Complete voodoo economics. They were hidden on the books of PSUs on time. In FY14 only 20K was provisioned by Chidu, whereas bonds were worth 1.44 lakh crore with interest of 70,000 crore due. Modi govt finally paid 2 lakh Cr to clear ./10

16) MNREGA wages were already indexed for inflation and they were due to go up further with Development Commission report. But where was the provision for this Chidu? @TheJaggi had written a wonderful piece then firstpost.com/business/econo… ../11

17) Chidu era was famous for IT refunds never coming back. There were several thousand Crs overdue. But govt didnt have money to refund. Finally Modi Govt had to come in and clear all those dues. How can we forget this voodoo economics of PC? business-standard.com/article/econom…
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18) Many had written about Chidu's scorched earth policies and voodoo economics, but this one piece by @TheJaggi stood out then. Leaving it as a final thought to close this thread. Read, Recollect, and Reflect. Don't bank on public amnesia.

firstbiz.com/economy/scorch…
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