 Thank you very much for inviting me here to speak on this subject and I'd like to begin by congratulating the editors for bringing out this volume which I think will go a long way in making clear what has been happening. Unfortunately what has been going on is that we are comparing four years of this government with the previous government. I think four years is a long enough time to understand what has been going on during this government's time. We need not compare, but even if we compare, as I have written in my article in much greater detail, I would not be able to go into all the details, the economy which was in a very bad shape in 2012-13 had been recovering and by 2014 the economy was performing quite well. It wasn't as if it was in a deep crisis as it was in 2012-13, but what happened after 2014 was that the government administered two big shocks to the economy and this we need to understand. The first shock was demonetization. The second shock was the GST and both of them have damaged the economy quite substantially. Now the data doesn't seem to indicate this kind of damage that has taken place to the economy because our annual growth rate is based at the moment on a certain methodology and the data that comes out every quarter is based on yet another methodology. The methodology that is existing is that we predict on the basis of the organized sector data. So we have two parts of the economy, the organized sector and the unorganized sector. Organized sector employs only 7% of the workforce. The unorganized sector employs 93% of the workforce. The organized sector produces 55% of the output, unorganized sector produces 45% of the output. But this unorganized sector data comes with a time lag of 3 to 5 years. They are called reference years. In those reference years you do a survey of how much activities there in the unorganized sector like say cycle rickshaws or workers at home or many other such unorganized activities. Now therefore the methodology involves that we take the ratio of the organized sector to the unorganized sector and we assume that that ratio remains unchanged. So in a sense we are saying the rate of growth of the unorganized sector is the same as the rate of growth of the organized sector. So if the organized sector is growing at 7% then it is assumed that the unorganized sector is also growing at 7%. But what happens in a shock? When a shock is administered this ratio changes. So what happened during demonetization? It's the unorganized sector which got hit very badly because that was the one which was operating in cash, didn't have bank accounts, didn't have electronic means of transfer. And that's why you notice that the large number of laborers moved out of urban unorganized sector to rural areas. And that's why the demand under the MG and REGS scheme shot up. You know it's shot up by a factor of 4 and 5. But people say that there was not enough money to pay the wages of MG and REGS workers otherwise it would have shot up by a factor of 10. So a large number of workers moved out of the urban areas into the rural areas and they were looking for work. That indicates that massive decline. Second factor which shows what happened during the shock was that for the first time in 62 years the credit off take from the banks declined dramatically. Now what is the meaning of credit off take? Credit off take is used for production and for investment. So if credit off take suddenly declines then it implies that production is down and investment is down. So even the organized sector production got hit but not as much as the unorganized sector. So therefore the method that was applicable on November 7th, 2016 is not applicable on November 9th, 2016. The ratio of the organized to the unorganized sector changed dramatically. And because of that my argument was that the rate of growth of the economy turned negative. The surveys from that time of the unorganized sector, whether you take the State Bank of India survey, whether you take the all India manufacturers organization survey, whether you look at the Punjab Haryana Delhi Chamber of Commerce and Industries, their argument was that the organized sector and the unorganized sector got hit by anything like 50%. Even if you assume that 50% was an exaggeration, even if the unorganized sector got hit by 10%. Even then it means that 45% declined by 10% whereas the organized sector which is 55% continued to rise at the government given rate of 6%. So you have a rate of growth which is less than 1%. The same thing happened again with GST. When GST was brought in, again the unorganized sector got hit very badly. Why is it that the unorganized sector got hit very badly? Because the government says we have exempted those below 20 lakh, they need not register. Those between 20 lakh and 1.5 crore now, they are under the composition scheme. They also don't have to pay the GST except for a, you know, a cess of 1% and 2% you know. So in other words, the government is saying we have kept these people below 1.5 crore mostly out of the GST. But this is where the problem lies. If you are outside the GST, then you cannot give input credit to the large scale person who may be wanting to buy from you. And the large scale person would have to give a reverse charge. So therefore your working capital requirement goes up. So a large scale person would buy from a large scale person rather than from a small scale person. And therefore the small scale production become more expensive. So even though the small scale in the cottage sector are kept out of the GST, they have been hit very badly. And the reports are that the unorganized sector, trade, unorganized sector, business etc. Now one thing we must realize, when we talk of the small, what are we talking about? Mostly we will say MSME, so micro, small and medium enterprises. Now note, micro enterprises are 99% of the MSME and they employ 97.5% of the employment in the MSME sector. And it's the micro sector that's getting hit. It's not even the small and medium which constitute only 1% of the MSME. So the micro sector, the cottage sector, the small producer, they are the ones who have been hit very badly. Now when the micro sector gets hit, then what happens? They close down, they eat up the working capital. Therefore to restart a micro unit with working capital becomes difficult. And that's why large number of the micro units are still closed. Large number of the small units are still closed. During the demonetization period, I traveled to Ludhiana, looked at the hosiery industry and the bicycle industry, to Aligarh for the lock industry, you know, Muradabad for the brassware industry. I went to Gwalior and various other places and found that large number of small units had closed down. Large number of people had gone back to the villages etc. And before they could recover, the GST came and hit them. Therefore, what I've argued is that there are two circles of growth in the economy today. The first circle of growth is the organized sector, which can use banks, which can use credit, which can use other things, you know. And they will do well, because GST will enable them to become more efficient. One nation, one tax is good for say, Maruti. Maruti will buy, say, Chennai and sell in Srinagar, will buy something in Ahmedabad and sell in Guwahati. So one nation, one tax, one kind of taxation, there'll be scale economies for warehousing and various other things. But what about the small sector? The small sector buys locally and says locally. It does not gain in efficiency. So when the large scale gains in efficiency, gains in terms of the credit and various other things, they will displace the small sector. And that is what is the real problem. That over a period of time, the small and the micro sectors will get displaced by the large sector. Which has been going on for quite some time. It's not as if something new. But these two shocks have accelerated that process. And that is where I think we need to really worry that these two circles of growth, the organized sector growing because of the various advantages, plus at the expense of the unorganized sector, which is declining. So unorganized sector declining means large number of people will lose incomes, will lose jobs, etc. And that's where our employment problem comes. Because the large scale sector, as I said, the organized sector employs only 7% of the workforce. They of course have contract labor, etc. But the unorganized sector is where the bulk of the employment is. And if the bulk of the employment declines, then youth employment problems will aggravate. Already the youth is protesting, as you can see. And this protest will keep on increasing as this displacement of the small and the marginal sectors that increases, that will go up further. So in a sense, what has happened is that both these demonetization and GST have damaged the institutions. And that is a long term phenomenon. For instance, the credibility of the RBI was damaged. The credibility of banking was damaged. The credibility of currency was damaged by demonetization. Now this process is continuing further with the kind of formalization that is attempted. But what does formalization do? The income of the small or the micro doesn't increase just because it's formalized, it remains the same. They may now use more banking, but that doesn't mean that their employment goes up or their income goes up. Not only that, the Jandhan Yojna and other such Yojna that have been launched, what do they do as far as the micro and the small sectors people are concerned? What they do is they aggregate the savings, the small savings of a large number of people and funnel that into the large sector. So even the Jandhan Yojna and such inclusive programs that have been launched actually marginalize the marginal further. So again, these kind of inclusive programs in the financial sector are also marginalizing the marginal by doing this. Thank you. So we have a crisis as far as the small sector is concerned. We have crisis as far as the employment is concerned and the youth is concerned. We also have a crisis in the farming sector. Why is the crisis there in the farming sector, which is a very large sector? The crisis in the farming sector is because the costs have been rising, but incomes have not been rising. And why are not incomes rising? It's not that people are well fed, the large amount of malnourishment and so on. So it's not that people are well fed, but stocks are rising. Why are stocks rising? Because purchasing power of the unorganized sector, the vast bulk, the 93% of the workforce, that purchasing power is inadequate to buy. So we should not have had any stocks given the malnourishment, but we have stocks and that's a sign of inadequate purchasing power as far as the poor people are concerned. So therefore, the farmers are suffering also because the unorganized sector is getting damaged. So the unorganized sectors formed one circuit, the organized sectors formed another circuit. And these two are splitting apart further and further, and that creates social and political problems as we go along. One more problem that I'd like to flag in the few minutes that I have is the black economy. This government is supposed to have come on the agenda that will tackle the black economy. And indeed, they implemented a large number of things. The SIT was formed, the foreign money bill came and various other schemes, including demonetization. Now, as I was saying, demonetization has not helped check the black economy. Even though the number of tax filers has increased, but that doesn't mean that the tax collection has increased. And the GST, 40 lakh additional people have registered, okay, those businesses. But as Mr. Jaitley said in the parliament, the amount of tax collected is not going up correspondingly. And that has been seen repeatedly that number of tax filers doesn't correspond to the amount of tax that they pay, okay? This we have seen repeatedly in our situation where now today, there are some like 70 million tax filers of income tax. But effective number of taxpayers are only about 17 million, okay? And these 17 million are the ones who are really in the tax net. Formalization does not help, but the government keeps claiming the GST and demonetization and now digitization is to help the formalization process. But as I said, that doesn't necessarily help. In a sense, concluding my thing, we see inflation as a problem. We see growth rate as a problem. Why is inflation a problem? Because the unorganized sectors not able to deal with inflation. And the rate of inflation is higher than what the government says, because the services sector inadequately represented in the CPI and the WPI, okay? The CPI represents inflation of the services sector only to the extent of 30%, WPI doesn't represent it at all. So when services prices go up, they're not reflected in the inflation. And it's the services prices that have gone up substantially because of GST. Because the GST rate was raised from 15% to 18% for services. So even though some other product prices have dropped, the services prices have risen and they dominate. So in effect, the rate of inflation today is not three and a half or four or five percent, as the government says, but more like 7%, okay? No, I'll stop. So government is in a state of denial. They're very good at advertising. The large number of programs they have announced. And they keep claiming credit for what has not happened. So I think what we need to worry about today in the long run is that the economy is not doing as well. It's supposed to be doing as per the government statistic. There's 7%, my figure is that it's less than 1%. There's a crisis in the lives of large number of people that has taken place. And above all, institutions are being decimated. In the parliament, the prime minister did not answer one question on demonetization. He was present, but did not answer. That demotes the parliament on such an important issue you don't have. RBI was in trouble, banks were in trouble. So it's the long-term impact of the collapse of the institutions that need to be taken into account. Thank you very much for your patience.