JOIN USDarkest year of the economy in four decades: Chidambaram on GDP numbers
As India’s economy contracted by 7.3% in 2020-21, Congress on Tuesday dubbed the last fiscal as the “the darkest year of the economy in four decades” that left most citizens poorer than they were two years ago.
While former Congress President Rahul Gandhi described the adverse GDP and unemployment figures as “PM’s hall of shame – Minimum GDP, Maximum Unemployment’, former Finance Minister P Chidambaram asked the government to print money and increase spending to kick start the economy.
“This is not the time to worry about the fiscal deficit. So what if the deficit widens to 6.5%? We can’t lose another year like we lost the last year. But the way the government is reacting, we are going to lose another year. My advice to the government is to act boldly and spend. Borrow or print money and spend,” Chidambaram told a press conference here.
He slammed the Modi government for misleading the people with claims of “green shoots” of economic recovery and termed it a “false story”
“FY2020/21 has been the darkest year of the economy in four decades. The performance in the four quarters tells the story. The first two quarters witnessed a recession (-24.4 and -7.4%). The performance in the third and fourth quarters did not herald a recovery,” Chidambaram said.
The senior Congress leader also made a strong pitch for direct cash transfers to the needy and contended that the existing scheme of free ration was inadequate.
“It translates to Rs 32 per head. More and more economists are supporting cash transfer to the needy,” Chidambaram said.
He said industry bodies CII and FICCI have echoed the views of the Congress on cash transfers to the poor and fiscal expansion.
Chidambaram said unemployment was growing and has now crossed 11%, labour force participation was declining and more and more people were falling below the poverty line.
“All these are indicators that the economy is in dire straits...All this points to deep misery among the poor people,” the Congress leader said and accused the Modi government of being “completely insensitive” to what the lower middle class and the poor were facing.