New Delhi: Congress party, on Thursday, hit out at the Central Government over the economic situation in the country, claiming that the Union Budget 2021-21 will be a "conjurer's illusion".
Party's senior leaders and former Union Ministers P Chidambaram, Jairam Ramesh and Mallikarjun Kharge addressed a press briefing on Congress' expectations and demands from the Budget.
"We have no expectations that this government will accept our assessment or will heed our diagnosis of, and prescription for, the economy. We know that this government is exceptionally obstinate, impervious to good advice and uncaring about the calamitous consequences of its economic policies," Chidambaram said to the media.
Slamming the Center, the Congress leader claimed, "Even without the pandemic, the economy would have continued on the downward path that had begun in the first quarter of 2018-19 and continued for eight successive quarters. The pandemic pushed the economy into an abyss: -23.9 per cent in Q1 of 2020-21 and - 7.5 per cent in Q2."
He also hit out at the Union Finance Minister Nirmala Sitharaman, by saying, “The current Finance Minister has the distinction of presiding over the first recession in four decades. The year 2020-21 will end with negative growth. None of the numbers estimated at the beginning of the year will be achieved.”
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“We are afraid that the Finance Minister will present a dressed-up revised estimate for 2020-21 and attempt to build an attractive narrative for 2021-22. The revised estimates for 2020-21 will be a set of false numbers and, therefore, the Budget Estimate for 2021-22 will be a conjurer’s illusion,” he added.
Chidambaram claimed that the economy is in a recession and its recovery will be slow and painful, as the rate of GDP growth in 2021-22 (in constant prices) will be modest, which will not be more than 5 per cent. He also held the Central Government "solely" responsible for the economic condition of the country, saying that the seven years of the Modi government have wrecked our economy and the prospects of high growth.
Congress party has asked the Central Government to impart a large fiscal stimulus to the economy, even if it is belated and to 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 MSMEs to revive closed units, recover the jobs that were lost and create new jobs for those who have moderate education and skills. Reduce tax rates, especially GST and other indirect tax rates on petrol and diesel. Increase government capital expenditure," Chidambaram suggested.
He also asserted that the Government should "abandon protectionist policies", enter into bilateral trade agreements with as many countries as possible, and remove the bias against imports. Conclusion:Replying to a question of ETV Bharat, Chidambaram stated 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," he said.
