He also said the economy was passing through its “worst-ever crisis” due to the “death of demand” in sectors.
He reiterated the new citizenship law was a ploy of Narendra Modi government to divert attention of people from important issues like the “failure of economy”.
“This government ignored problems related to the economy and tried to portray that everything is fine by manipulating figures. But the data cannot be fudged forever. Now, they have accepted the problem and are saying that they will do something about it,” Sinha said.
As per recent government data, wholesale prices based inflation surged to an eight-month high of 2.59 per cent in December, as against 0.58 per cent in November due to sharp rise in prices of food articles like onion and potato.
The annual inflation, based on monthly wholesale price index (WPI) was recorded at 3.24 per cent in April 2019.
Sinha, who had served as finance minister during 1998-2002, said the current government had left with no funds to utilise.
“This government has used everything (funds) at its disposal. It is on the brink of bankruptcy now,” he said.
“Many people are saying that the government should spend more to boost the economy, but this government is speaking about curtailing expanses,” he said.
Sinha, who heads Rashtra Manch, claimed that Finance ministry had asked all the departments to spend just 25 per cent of the total allocated budget instead of the 33 percent, which it had allowed in the last quarter.
“Private investment has become zero due to the twin balance sheet problem. The NPA of banks has grown bigger instead of shrinking,” he said.
Sinha further said the lack of demand was affecting the economy, which “started with rural distress and gradually spread to urban areas due to demonetisation in 2016”.
“The problem has now spread to all sectors. For example, the transport sector is witnessing a slump in the demand of cars and two-wheelers. In the past, we had seen the demand slump, but this time it is the ‘death of demand’ which is unprecedented,” Sinha said.
He said the upcoming Budget will be crucial.
“Another thing which never happened in the past is PM Narendra Modi himself conducting 13 pre-budget consultations with stake-holders unlike in the past when finance ministers used to conduct the same,” Sinha added.
In such scenario, the government had introduced the “divisive CAA”.
He said Union Home Minister Amit Shah had announced in Parliament that the government will bring in National Register of Citizens.
“The CAA and probable NRC are aimed at diverting attention of people and dividing the country on religious lines. There was no need to bring in the CAA, as the old act had the provision to give citizenship, and many people were given citizenship under it,” Sinha said.
Considering the experience of the NRC in Assam, the exercise should never be introduced in the country, he added.
He also questioned the need for the National Population Register (NPR), saying Aadhaar is equivalent to the NPR.
“The question before the UPA government and later the NDA government after 2014 was to whether go for Aadhaar or NPR, the Modi government opted Aadhaar,” he said.
He accused the BJP government in Gujarat of misusing section 144 (of CrPc) and not allowing even a peaceful protest against the CAA and NRC.