‘Budget should have put more money into the hands of the people’

Chennai | Updated on February 03, 2020

Former Finance Minister and senior Congress leader P Chidambaram   -  THE HINDU

Focus should have been on improving demand and consumption, says Chidambaram

The first thing that Finance Minister Nirmala Sitharaman should have done in the Union Budget was to ensure that money is put in the hands of a large number of people to improve demand, and not in a few elite people, said senior Congress leader and former finance minister P Chidambaram.

Only mass consumption will stabilise demand, he said.

Given the constraints of finance, the government should have redrawn its expenditure pattern so that many of long gestation programmes like Udaan are either deferred or slashed down.

Instead, bulk of the money should have been put in programmes like MNREGA and PM Kisan Yojana that ensures that money goes in to the hands of people in three months to improve demand and consumption, he said at an interactive meeting on analysis of the Union Budget proposals 2020-21 organised by the Southern India Chamber of Commerce and Industry (SICCI).

‘Radical surgery needed’

The economy is in distress and requires a radical surgery.

However, this has not been done.

Unfortunately, the government is unwilling to accept that the economy is demand constrained and investment starved even as growth has declined in the last six quarters.

Both imports and exports have declined, and most of the economic indicators are in negative.

At the end of every quarter, the government said that the turnaround will happen next quarter, but this did not happen. This is an alarming trend, he said.

“The year 2019-20 was a wasted year. I have a fear that fiscal 2020-21 may also be a wasted year. The first six months have already been wasted.

“I do hope that after a debate in Parliament, they will make some changes or adjustments, and they will take some of our meaningful advise to revive the economy to grow at least 6 per cent, and there after to 7 per cent,” he said.

Published on February 03, 2020

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