Tribune News Service
New Delhi, January 28
On the eve of the Budget Session of Parliament commencing on Friday, the Congress on Thursday issued a 10-point “to-do list” for Finance Minister Nirmala Sitharaman calling for an immediate and large fiscal stimulus to revive a sagging economy and significant boost for health and defence expenditure.
Former finance minister P Chidambaram, while squarely blaming the government for pre-COVID economic slowdown and COVID-era economic mismanagement, said today that the Congress’ wish list for the Union Budget 2021-2022 was completely doable.
“We recognise that there are some imperatives that fall outside economic management such as increase in expenditure on health infrastructure and increase in defence expenditure. We will support significant increase under both heads,” the former finance minister said refusing to comment on whether the Congress would support the proposed COVID cess the Government is mulling.
“Cess on whom and cess on what? Once we know that, we will respond,” Chidambaram said a further cess on petrol and diesel, which are already highly priced, would not be advisable.
The former finance minister, in his assessment of the economy, said Sitharaman had the distinction of presiding over the first recession in four decades.
“The economy is in a recession. The recovery will be slow and painful, and the rate of GDP growth in 2021-22 (in constant prices) will be modest — no more than 5 per cent,” Chidambaram said listing potential solutions “should the Government care to heed”.
Among Congress suggestions for economic revival are — impart a large fiscal stimulus to the economy, even belated; such a stimulus alone will put money in the hands of the people and stimulate demand.
“Make direct cash transfers to 20-30 per cent of the families at the bottom of the economy at least for a period of six months, formulate and implement a rescue plan for the MSMEs to revive closed units; reduce tax rates, especially GST and other indirect tax rates on petrol and diesel; increase government capital expenditure; recapitalise public sector banks immediately and encourage them to lend without fear of investigative agencies probing every loan; abandon protectionist policies, reengage with the world and enter bilateral trade agreements with as many countries as possible thereby removing a bias against imports,” said Chidambaram.
He also called for formulation of sector-specific revival packages for telecommunication, power, mining, construction, aviation, tourism and hospitality; review of amendments to tax laws that have been widely viewed as tax terrorism and comprehensive and time-bound review of the regulations made by the RBI, the SEBI and other regulatory agencies that have been widely regarded as over-regulation.
On agriculture, the former finance minister said: “Agriculture will grow at a satisfactory rate if the government does not arbitrarily disrupt the sector with anti-farmer laws and retrograde import/export policies for agricultural produce.”