Govt is like a deer caught before headlights: Chidambaram

Former Union Minister Anand Sharma. File

Former Union Minister Anand Sharma. File   | Photo Credit: Shiv Kumar Pushpakar

Former Union Ministers P. Chidamabaram and Anand Sharma on Friday took a dig at the Union government over ‘contradictory’ growth projections by experts who are a part of the Prime Minister's Economic Advisory Council (PMEAC), and asked who is in charge of India's economy.

While Mr Sharma said the country needed “economic and not headline management”, Mr. Chidamabaram said the government was “paralysed and unable to move in any direction”.

‘In interviews to the same media outlet (The Wire) two economists of the PM’s Economic Advisory Council reached diametrically opposite conclusions on growth in 2020-21. One said that the economy will contract between 5 and 7 per cent. The other said the economy could grow up to 1 per cent ! No wonder, the government is like a deer caught between the headlights - paralysed and unable to move in either direction”, Mr. Chidamabaram said in a tweet.

“The government has decided to “do nothing”. Whether it be the economy or the pandemic, the government has left the fate of 138 crore people to the gods!” added the former Finance Minister.

Mr. Sharma said India's economy was sharply declining before the pandemic and the lockdown due to erratic decisions, flawed policies and monumental mismanagement. 

“Now [the economy] staring at a prolonged recession and massive youth unemployment. Who is in charge- Prime Minister or Finance Minister? Govt is clueless on economic revival. Confusion prevails in the PM's Economic Advisory Council itself with Sajjid Chinoy warning of 5-7% GDP contraction and Ashima Goyal forecasting 1% growth”, he asked in a tweet.

Sajjid Chinoy’s comment

On Thursday, in an interview to a news portal, J P Morgan’s Chief India Economist Sajjid Chinoy, who is also a member of the PMEAC, said various estimates suggested the Indian economy contracting between 5 and 7 per cent. He, however, made it clear that the views were his own and not that of the Council.

But his position was very different from another member of the PMEAC, Professor Ashima Goyal of the Mumbai-based Indira Gandhi Institute of Development Research. He had predicted a growth of 1 per cent.

Speaking to The Hindu separately, Mr Sharma talked of a specific road map for economic recovery and cautioned the government against dipping into the reserves of Reserve Bank of India (RBI) to meet the shortfall in revenue collections. 

“After the government took money from RBI last time,its contingency reserves are at its lowest threshold. You cannot leave the central bank fragile”, he said.

“There has to be a road map for economic recovery as the country cannot sustain this kind of joblessness and unemployment. There is despair among the youth and people are angry in rural areas as there are no avenues of employment after going back. The government’s fiscal stimulus doesn’t even account for one per cent of our GDP”, he added.

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Printable version | Sep 27, 2020 4:36:24 PM |

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