BJP MP Subramanian Swamy on Thursday said the country needs policy changes and a course correction for higher growth and argued for the abolition of income tax completely to improve savings rate and investments.
“While it’s commendable that the economy has grown 7.2 per cent and 7.9 per cent in fiscal 2016, this is not enough. The country needs to show a growth rate of 10 per cent plus to solve the problem of poverty. The honeymoon of two years is over. We will persuade for a course correction to increase the growth rate and improve the savings level,” Swamy said while addressing the members of Indian Merchants Chamber. A 10 per cent growth for 10 years will eliminate poverty, he said.
“There’s a lot of disappointment in the industry. Small and medium sized industries are facing a credit crunch. Small units are suffering from higher rates. Credit should be made available to small and medium units at reasonable rates. Now the prime lending rate is 10 per cent. They depend on banks to raise funds. Big units somehow manage to raise funds from abroad… in the US, the PLR is just 2 per cent,” Swamy said.
Coming down on the RBI’s monetary policy, Swamy said “it’s like the doctor killing a patient” to revive him. “The outlook for the industry will be robust if we can lower the interest rate to 9 per cent. The middle class is suffering,” he said.
Stating that the country has enough financial resources, Swamy said the government should abolish income tax completely to boost saving rates and investment in the economy. “You get hardly Rs 2,00,000 crore as income tax income. But you can raise a huge money through auction of spectrum, coal etc. Rs 4 lakh was raised from the 2G auction. You will get more revenue from indirect tax. We need to raise the level of rate of savings to 40 per cent of the GDP,” he said.
Reiterating his demand for the recall of RBI Governor Raghuram Rajan, Swamy said: “This is a country of 1.25 billion people. We can’t find a Governor?”
Swamy also blamed forward trading in the commodities market for the high food inflation in the country. “Forward trading in foodgrains should be banned. Big speculators are profiteering… they do forward deals and buy commodities from the farmers and sell them at higher prices,” he said.