“The current Finance Minister has the distinction of presiding over the first recession in four decades,” Mr. Chidambaram said
Days before Finance Minister Nirmala Sitharaman presents the Union Budget for 2021-22, the Congress on Thursday said she is the first Finance Minister to preside over a recession in the past four decades and accused the Narendra Modi government of “wrecking the economy” in the past six years.
At a press conference with former Union Ministers Jairam Ramesh and Mallikarjun Kharge at the Congress headquarters, former Finance Minister P. Chidambaram shared the party’s assessment of the economy and offered some prescriptions like a large stimulus package, direct cash transfers to the 20-30% of the families at the bottom of the economy and a review of tax amendments that are being described as “tax terrorism”.
Apart from Budget-related issues, Mr. Kharge said the party would also raise the issue of farmers’ agitation and the alleged intelligence failure that resulted in violence on January 26.
“We know that this government is exceptionally obstinate, impervious to good advice and uncaring about the calamitous consequences of its economic policies. Nevertheless, we shall place our views before the people of this country,” Mr. Chidambaram said in his opening remarks.
He said the Congress had pointed out that the economy was on a downward slope even before COVID-19 but the pandemic put into an abyss.
“There is no point in wasting time over the Budget of 2020-21. It was a disaster at the start and will be a catastrophe at the end of the fiscal year. We are afraid that the FM will present a dressed-up Revised Estimates (RE) for 2020-21 and attempt to build an attractive narrative for 2021-22. The RE for 2020-21 will be a set of false numbers and, therefore, the Budget Estimates for 2021-22 will be a conjurer’s illusion,” he said.
Noting that the economy is in recession, with growing unemployment and wage cuts, low savings rate and inadequate credit growth, the party listed out some concrete suggestions like announcing to prepare a rescue plan for micro small medium enterprises [MSMEs] and closed units, hiking government capital expenditure, recapitalising public sector banks, reducing tax rates especially GST and other indirect tax rates (for example on petrol and diesel) apart from a fresh stimulus package.
It also advocated shunning protectionist policies and preparing sector specific revival packages for telecommunication, power, mining, construction, aviation and tourism and hospitality sectors.
“Seven years of the Modi government have wrecked our economy and the prospects of high growth. Dr. Arvind Subramanian, former CEA, described 2004-2010 as the golden years of the Indian economy. The equivalent period of 2014-20 has witnessed the slow but inexorable descent into a deep hole. The conclusion of a recent study by Brookings using IMF and World Bank data is humiliating but not surprising at all: the biggest rise in poverty will be in India and India will overtake Nigeria and become the country with the largest number of poor people. That is the contribution of the Modi government at the end of seven years,” read the Congress statement.
The Congress claimed instead of a V-shape recovery, India will witness K-shaped growth, indicates that some sections will grow at the expense of others.
Mr. Chidambaram said the political buck for January 26’s violence stopped at Home Minister Amit Shah’s desk.