Updated: June 2, 2021 6:24:56 am
A day after government estimates showed that India’s GDP contracted by 7.3 per cent in 2020-21, senior Congress leader and former Finance minister P Chidambaram on Tuesday said the government must wake up and not lose yet another year, admit its errors of commission and omission, reverse its policies, and heed the advice of economists.
He asked the government to print money if needed and increase spending.
Arguing that 2020-21 has been the “darkest year of the economy” in four decades, he said the current state of the economy is largely due to the impact of the pandemic, but it has been compounded by the “ineptitude and incompetent” economic management of the BJP-led NDA government.
“Good advice by distinguished economists and renowned institutions has been rebuffed. Worldwide experience has been ignored. Suggestions on fiscal expansion and cash transfers have been turned down. Hollow packages like Atma Nirbhar have fallen flat,” he said at an AICC press conference.
On printing money, Chidambaram said, “We have the space and the sovereign right to print money. If at any point the government feels that too much is being printed, it can always stop printing money. But at the moment, I think printing money is clearly advised.”
He said all indicators point to the fact that the economy is in dire straits.
He also said the government is completely insensitive and impervious to what the lower-middle class and the poor are going through. Arguing that this is not the time to worry about fiscal deficit, Chidambaram said, “We can’t lose another year like we lost the whole of last year. And I am afraid the way this government is reacting it is going to lose another year.
This, he said, “is time to act boldly and decisively.”
“Borrow and spend — if necessary, print money and spend. Spend on healthcare, infrastructure but spend. And as part of spending, spend on welfare measures also….which today means cash transfers and distribution of rations,” he said.
Chidambaram recalled that Finance Minister Nirmala Sitharaman and Chief Economic Adviser Krishnamurthy Subramanian had talked about the economy starting to recover last year, when the first wave of the pandemic appeared to subside. “They saw green shoots when no one else did,” the Congress leader remarked. “They predicted a V-shaped recovery. It was a false story, and we had expressed our strong reservations and warned there were no signs of a recovery.”
The Congress, he said, had then “pointed out that what the economy needed was a strong dose of stimulus, including increased government expenditure, direct transfers of cash to the poor and liberal distribution of free rations”, but “our pleas fell on deaf ears, and the result is a negative growth of (minus) 7.3 per cent.”
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