Reset of economic policies necessary: Chidambaram

With the state of Indian economy remaining a "cause of extreme concern", Congress on Saturday said a "reset of the economic policies" is necessary and expressed hope that it will be able to defeat the "hype" being created by Narendra Modi the way it overcame the 'India Shining' campaign.

Former Finance Minister P Chidambaram, who is heading the panel and leading the deliberations on economy at the Chintan Shivir here, admitted that there has been failure on their part to effectively communicate the Modi government's failure economy and the party will surely sharpen its communication strategy.

He said there has been a "complete breakdown of trust" between the Centre and states, including those governed by the BJP, as he called for an extension of the GST compensation window for at least three more years from June 2022.

Congress would “strongly disapprove” if any attempt is made to subvert GST Council and prevent it from recommending an extension of of GST compensation period by another three years.

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Addressing a press conference here, he also called for a "comprehensive review" of Centre-States fiscal relations and preparing 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.

Chidambaram cited "unacceptable levels" of inflation, worsening job situation and fall in spending on social services during the Modi rule to target the government. He acknowledged  that the external situation is adding to the pressures of the economy but said the government appeared “clueless on the ways to deal” with the developments.

Calling for a reset of the economic policies taking into account the global and economic developments 30 years after liberalisation, he said it must address the questions of rising inequalities, extreme poverty among the bottom 10% 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.

When asked whether it meant that the Congress was stepping backwards on liberalisation, he said, “we are not stepping backward. We are stepping forward,” he said.

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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 the Congress was able to defeat the ‘India Shining’ campaign unleashed by the BJP in 2004 Lok Sabha election and that it could repeat it now. “Inflation has not yet become a cause for large protests. If it continues at this rate, it will be,” he said.

On the job front, he said the government’s refusal to open up jobs in the public sector is anti-youth. The government downing the shutters on jobs is an onslaught on the rights of youth, especially those who have just completed their degrees.

Asked whether the Congress would be providing its inputs to the government, Chidambaram said the questioner appeared optimistic that the Modi dispensation would listen to anyone. He said the party would take up the issues to the people.

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