State Of Indian Economy Cause Of Extreme Concern: P Chidambaram At Chintan Shivir

| Updated: 14 May, 2022 10:43 am IST

NEW DELHI: Former finance minister and senior Congress leader P Chidambaram on Saturday stressed that the state of the Indian economy is a cause of “extreme concern” as the post-pandemic recovery has been indifferent and said that a reset of economic policy is the need of the hour.

Addressing a press conference on the second day of the party’s Nav Sankalp Chintan Shivir in Udaipur, Rajasthan, Chidambaram said, “The state of the Indian economy is a cause of extreme concern. A slower rate of growth has been the hallmark of the present government in the last 8 years. The post-pandemic recovery has been indifferent and halting. The growth estimates of 2022-23 have been lowered from time to time in the last five months.”

Slamming the government over the inflation, Chidambaram said that inflation has risen to “unacceptable levels”, and threatens to rise further.

“WPI (Wholesale Price Index) inflation is at 14.55 per cent and CPI (Consumer Price Index) inflation is at 7.79 per cent. The government is actually fuelling the rise of inflation by its wrong policies, especially through high taxes on petrol and diesel, high administered prices and high GST tax rates,” he alleged.

He also said that the job situation has never been worse and the Labour Force Participation Rate (LFPR) is at a historic low of 40.38 per cent and the unemployment rate stands at 7.83 per cent.

He further said that “we reiterate our charge that social services expenditure as a proportion of total expenditure has fallen to an average of 5 per cent (in 8 years) from an average of 9 per cent in the 10 years between 2004 and 2014”.

The Congress leader also said that the external situation has added to the pressures on the economy. “The government appears clueless on the ways to deal with these developments. USD 22 billion has flowed out of the country in the last seven months. The foreign exchange reserves have been depleted by USD 36 billion. The exchange rate stands at Rs 77.48 to a dollar, the highest ever,” he said.

Highlighting the works of the Congress government in the past, Chidambaram said, “A Congress-led government ushered in a new era of liberalisation in 1991. The country has reaped enormous benefits in terms of wealth creation, new businesses and new entrepreneurs, a huge middle class, millions of jobs, exports and lifting 27 crore people out of poverty during a 10-year period.”

“After 30 years, it is felt that taking into account global and domestic developments, it may be necessary to contemplate a re-set of the economic policies,” he said.

He said that a re-set of economic policies must also address the questions of rising inequalities, extreme poverty among the bottom 10 per cent of the population, India’s rank in the Global Hunger Index 2021 (101 out of 116 countries) and evidence of widespread nutritional deficiency among women and children.

“We believe that a re-calibration of economic policies can influence health and education outcomes,” he said.

He further stressed that the time is ripe for a comprehensive review of centre-states fiscal relations. “The consequences of the poorly-drafted and unfairly-implemented GST laws brought in by the Modi government in 2017 are there for everyone to see. The states’ fiscal position is fragile as never before and needs urgent remedial measures,” the former minister said.

He also emphasised that “we believe that we must prepare the Indian economy and the Indian workforce to adapt to the ways in which industry, business and trade will be conducted in the 21st century with the greater use of automation, robotics, machine learning and artificial intelligence”.

“We believe that important changes in economic policies will be required in the light of climate change and the need for mitigation and adaptation,” he said.

The Congress is holding a three-day chintan shivir in Udaipur, with over 400 party leaders participating the same.

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