Govt has no plan to revive economy: P Chidambaram
November 12, 2020 19:08
Former finance minister P Chidambaram, reacting to the RBI admitting on Wednesday that the economy has gone into a recession for the first time, made this statement:
'For the first time since data was recorded methodically -- some say for the first time in the history of independent India -- the Indian economy has gone into a recession, as defined by economists.
In Q2 of 2020-21, according to the RBI, the quarterly economic growth rate is expected to decline by -8.6 per cent. A negative growth rate in two successive quarters is a recession.
It is therefore surprising that the finance minister should quote the RBI as predicting that the economy will register a positive growth rate in the third quarter.
Nearly 1 1/2 months of the third quarter is already over and there are no signs that the growth rate will turn positive in the third quarter.
The Congress party has repeatedly emphasized the steps that need to be taken to revive the economy. Let me list four of them:
1. Farmers must get fair and remunerative prices for their produce. Only a small fraction gets MSP. The recent farm Bills have put even that in jeopardy. Government has done nothing to ensure that farmers get fair prices.
2. The very poor are outside the formal economy. There are millions who have lost their jobs and livelihoods. Unless money is put in their hands, they will not be able to contribute to the revival of demand and the consequent revival of the economy. It is absolutely necessary that a scheme like NYAY must be implemented.
3. As far as the formal economy is concerned, the government has done nothing to bring back the jobs that were lost or to create new jobs. The unemployment rate on 11-11-2020 stood at 6.4 per cent.
4. It is feared that state governments will cut their capital expenditure by nearly Rs 2.7 lakh crore. That is about one-half of the budgeted capital expenditure by the states. The Centre is starving the state governments of funds and doling out measly sums of money.
Unless more money is devolved on the states, the states will curtail capital expenditure in 2020-21 and the revival of the economy this year will be a pious wish.
The economy continues to be in dire straits and the government does not have a plan to revive the economy. On the other hand it is busy deflecting the attention of the people from the economy and managing the headlines about the economy.'
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