Former Union finance minister P Chidambaram said the country’s economy is a major cause of concern and it is about time to reset the economic policies.
Chidambaram, who heads the panel on economy constituted by Congress president Sonia Gandhi at the party’s three-daybeing organised in Rajasthan’s Udaipur, was speaking at a press meet.
Sharing the minutes of the discussion, the former finance minister said a slower rate of growth has been the hallmark of the present government in the last 8 years, adding that the post-pandemic recovery has been indifferent and halting.
Chidambaram along with nine others are steering the discussion on the economy at the shivir. Their group has 60 members.
On Friday, around 37 members expressed their views for over 4 hours during the event where over 400 Congressmen and women are taking part.
Chidambaram said the discussions will continue till Sunday. Speaking on inflation, he said it has risen to unacceptable levels and threatens to rise further.
The country’s wholesale price index (WPI) is at 14.55 per cent and the consumer price index (CPI) is at 7.79 per cent. The former union minister said the government is fueling the rise of inflation by its wrong policies, especially through high taxes on petrol and diesel, high administered prices, and high goods and services tax rates.
Highlighting the issue of unemployment, he said the Labour Force Participation Rate (LFPR) is at a historic low of 40.38 per cent and the unemployment rate stands at 7.83 per cent.
He reiterated the charge that social services expenditure as a proportion of total expenditure has fallen to an average of 5 per cent (in 8 years) from an average of 9 per cent in the 10 years between 2004 and 2014.
He said the external situation has added to the pressures on the economy. The senior Congress leader said, “The government appears clueless about the ways to deal with these developments.”
The Congress leader said a Congress-led government had ushered in a new era of liberalisation in 1991.
He added that the country has reaped enormous benefits in terms of wealth creation, new businesses and new entrepreneurs, a huge middle class, millions of jobs, exports, and lifting 27 crore people out of poverty over 10 years.
He suggested that after 30 years, it is felt that taking into account global and domestic developments, it may be necessary to contemplate a re-set of the economic policies.
“A re-set of economic policies must address the questions of rising inequalities; extreme poverty among the bottom 10 per cent of the population and India’s rank in the Global Hunger Index 2021 (101 out of 116 countries) among others,” he said.
The former finance minister said the time is ripe for a comprehensive review of Centre-states’ fiscal relations.
He said the country should make use of automation, robotics, machine learning, and artificial intelligence in learning and trade.
Chidambaram also mentioned important changes in economic policies that will be required in light of climate change and the need for mitigation and adaptation.