‘Time to spend, not worry about deficit’

Spending more on healthcare and public distribution could be the only way to address the negative GDP growth, the Opposition parties suggested to the Centre on Tuesday. Commenting on the GDP numbers released on Monday, the Opposition leaders said the Centre, more than worrying about fiscal deficit, should strive to ensure social security for the people, especially the lower middle class and the poor.

Talking to reporters, former Finance Minister P Chidambaram said “ineptitude and incompetent management” of the economy resulted in the present situation. “As expected, the GDP at constant prices recorded a negative growth of 7.3 per cent, the first time India has recorded negative annual growth since 1979-80,” he said.

He said the first two quarters of 2020-21 witnessed a recession (-24.4 and -7.4 per cent) and the performance in the third and fourth quarters did not herald a recovery. He said the Finance Ministry predicted a V-shaped recovery, but he charged, “It was a false story and we had expressed our strong reservations and warned there were no signs of a recovery. We had pointed out that what the economy needed was a strong dose of stimulus, including increased government expenditure, direct transfers of cash to the poor and liberal distribution of free rations. Our pleas fell on deaf ears, and the result is a negative growth of (-) 7.3 per cent.” Chidambaram said the most worrying part is that the per capita GDP has fallen below ₹one lakh, to ₹99,694. “The deeply worrying conclusion is that most Indians are poorer than they were two years ago,” the Rajya Sabha MP said.

Blaming the Centre for the current situation, he said good advice by distinguished economists and renowned institutions has been rebuffed.

“Worldwide experience has been ignored. Suggestions on fiscal expansion and cash transfers have been turned down. Hollow packages like Atmanirbhar have fallen flat,” he claimed.

‘Act boldly’

Chidambaram said the Centre should spend more. “This is not the time to worry about fiscal deficit. It should not stop us from spending. This is the time to act boldly and decisively. Borrow and spend. If necessary, print money and spend. Spend on healthcare, spend on infrastructure and welfare measures. But spend,” he said. CPI (M) general secretary Sitaram Yechury said the slide in India’s GDP is the worst among SAARC countries. .

Modi’s seven years - the worst destruction of the Indian economy. Unless halted, Modi will ensure its complete decimation ruining both country and the people,” Yechury charged.

He claimed the destruction of country’s economy began with demonetisation and GST implementation much before the pandemic hit here.

“Merciless loot of national assets for private gains for his cronies. Modi must not be allowed to absolve himself using the pandemic pretext,” he alleged.

He said the revival of the economy can begin only with domestic demand rising with cash transfers; MNREGA expansion; public investments generating jobs building infrastructure., he said and urged the Centre to transfer ₹6000 to all the unemployed.

COMMENT NOW