Date:25/10/2008 URL: http://www.thehindu.com/2008/10/25/stories/2008102556321200.htm

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BJP: crisis home-grown, Chidambaram should go

Neena Vyas

NEW DELHI: With the Sensex crashing more than 1,000 points on Friday, the Bharatiya Janata Party said the economy was suffering from a “home-grown crisis” and Finance Minister P. Chidambaram should resign.

Leading the attack on the “mismanagement of the economy” was the former Finance Minister Yashwant Sinha. On Thursday the stock market went up and then came down sharply as some steps the Minister said SEBI would take were not taken, Mr. Sinha said. “I demand an inquiry into profits made by the sharp ups and downs in the market as a result of the Finance Minister’s statement yesterday [Thursday].”

Although earlier the BJP and Mr. Sinha differed with Mr. Chidambaram’s assessment that India was more or less immune to the global meltdown – the BJP had insisted India too would be severely affected – Mr. Sinha on Friday said the country’s current woes were “home-grown.” His charge was the government was unable to meet the situation or build confidence.

No piecemeal approach

What was required were not piecemeal measures, but disclosure of a road map on what it planned to do over the next six months to instil confidence. It was not a small development that the U.S. dollar was now worth more than Rs. 50 and $386 billion had been lost from India’s reserves since March this year, he said.

The government and the various regulators had failed. On a day when the Reserve Bank of India was to unveil its credit policy for the busy season ahead, it announced no new measure — no change in the cash reserve ratio, no change in the repo rate and no change in the statutory liquidity ratio. The disappointment in the market led to the crash of over 1,000 points, Mr. Sinha said.