The financial year of 2020-21 has been the ‘darkest’ year of the economy in the past four decades and that’s why the Narendra Modi government should heed the advice of economists to avoid its repeat, the Congress said on Tuesday.
Addressing a virtual press conference, former Union Finance Minister P. Chidambaram said the government needs to ‘wake up,’ reverse its policies by admitting the errors of commissions and omissions, and increase spending by printing more money.
Separately, former Congress chief Rahul Gandhi tweeted, “PM’s hall of shame — Minimum GDP. Maximum Unemployment”.
‘Ineptitude, incompetence’
“The current state of the economy is no doubt 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,” Mr. Chidambaram told reporters.
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He alleged that advice of distinguished economists had been rebuffed, world-wide experience ignored, suggestions on cash transfers and fiscal expansion have been turned down and ‘hollow packages’ like Atmanirbhar have fallen flat.
“We may note that Nobel Laureate Abhijit Banerjee has called for printing money and increasing spending. Yet, even as recently as yesterday morning, the Finance Minister gave a long interview to some newspapers defending her misguided and disastrous policies,” the Congress leader said.
Taking a dig at Union Finance Minister Nirmala Sitharaman and her Chief Economic Advisor, Mr Chidambaram said, “They saw ‘green shoots’ when no one else did. They predicted a V-shaped recovery.”
“We had 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. Our pleas fell on deaf ears, and the result is a negative growth of (-) 7.3%,” he added.
Rising unemployment
The Congress leader said this is the not the time to worry about deficit as unemployment has reached 11%, participation of labour force is declining. He also quoted an Azim Premji Unversity study to state that nearly 23 crore people have been pushed into poverty and indebtedness.
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“It should not make any difference and it should not stop us. What we need is not lose another year like we lost last year. This is the time to act boldly and decisively. Borrow and spend. If necessary print money and spend on health infrastructure and on welfare measures, do cash transfers. Take steps now and try to prevent a disaster of a third wave or a fourth wave,” he said.
Mr Chidambaram said many industry bodies including the CII and FICCI had also pleaded for fiscal expansion, including cash transfers to the poor and cited the RBI’s monthly review flagging the ‘demand shock’ and its consequences.
The Congress leader also criticised Ms. Sitharaman for treating the GST Council with ‘disdain’ as the government responded to the demands for giving concessions to life saving drugs and medical equipment by setting up another group of ministers.
“This is called procrastination….What has come out of the GST Council meeting? Zilch! I think the GST Council is being treated with complete disdain and contempt by the FM,” he said.
