Need ‘balanced’ economic growth: Former FM Chidambaram

Asserting that the current economic growth model is “unacceptable”, former Finance Minister P Chidambaram on Tuesday called for a ‘balanced’ growth that would help address the huge problem of income and wealth inequality in the country. He also said that the current growth rates are not showing any impact on the ground in solving unemployment and inflation related problems.

“Who is this government for — is it for the poor or are its policies so skewed that it is favouring the rich?” Chidambaram asked during his address in the Rajya Sabha as part of the short duration discussion on the economic situation in the country.

Reeling out data to buttress his point on rising income inequality and skewed wealth distribution in the country, Chidambaram said that bottom 50 per cent (of population) owns 3 per cent of national wealth and gets 13 per cent of national income.

However, the top 5 per cent owns 60 per cent of national wealth and top 1 per cent holds 22 per cent of national income, he added.

“This growth is unacceptable and this kind of growth is unacceptable. We need more balanced growth”, Chidambaram said.

Former Finance Minister also sought to know as to why was India’s spirited economic growth —billed as fastest growing large economy— not turning into more jobs for the people. 

“We are a large economy, we are growing at the fastest in the world, we are innovative, we have large FDI coming into the country, then why is it not seen on the ground? Why is it not seen in inflation numbers and unemployment numbers?”, he asked.

Chidambaram highlighted that the worker population rate (as per periodic labour survey) was 46 per cent and of this only 50 per cent actually work.

.Only 23 per cent of people work and this has been constant in the last nine and half years of BJP govt. If we have scintillating growth, why is this number not improving?” Chidambaram asked.

‘Spare a thought for vulnerable’

On inflation, Chidambaram acknowledged that inflation had indeed softened in the last few months, but noted that average CPI inflation was even today higher than RBI’s tolerance band (upper band of 6 per cent).

“Food inflation is 9.2 per cent. Combination of high unemployment and high food prices has led  to cut in household consumption. Impact is you borrow more. Net financial assets of households has plummeted to 50 year low of 5.1 per cent — it means people are consuming less, borrowing more and liquidating their household assets and savings,” he said.

All India Trinamool Congress Leader Derek O’ Brien said that if one were to look at the economy through the eyes of any family, it would tell a story of price rise —between 2014 to 2023 the  price of rice has gone up by 56 per cent, price of wheat by 59 per cent, milk by 61 per cent, tomatoes by 115 per cent or toor dal by 120 per cent.

He wondered if the wealth created in the Indian economy over the last decade has been passed on equitably. 

“Has it gone to the bottom of the pyramid. Why is it that rural inflation higher than urban inflation for the first time in six years. This is not election rhetoric, but hard numbers. Household saving is at 50 year low in 2022-23,” Brien asked.

While being fine with the stock markets going up and number of billionaires going up, he also said “spare a thought for the marginalised, for the vulnerable”.

He urged the government to find solutions to these economic issues.

Finance Minister Nirmala Sitharaman is expected to give her reply to the short duration discussion on Wednesday, which saw several leaders from Opposition parties raise queries on the economic growth model and its actual benefit to the poor.

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