‘Headline management,’ says Congress about Centre’s stimulus package amid recession scare
Former Finance Minister P Chidambaram said the economy cannot be revived unless money is put into the hands of poor people to boost demand.
The Congress on Thursday termed the Union government’s latest announcements to boost the economy as “headline management” and criticised it for not doing enough to deal with the technical recession that has hit the country for the first time ever.
Former Finance Minister P Chidambaram said that the economy is in “dire straits and “the government does not have a plan to revive” it. “On the other hand it is busy deflecting the attention of the people from the economy and managing the headlines about the economy,” Chidambaram told reporters in a virtual press conference, PTI reported.
His comments came after Finance Minister Nirmala Sitharaman on Thursday made a slew of announcements, which focused on incentivising companies for new hiring and providing collateral-free loans to stressed sectors, among other things.
Chidambaram however did not seem impressed with the government’s measures as he asserted that “2020-21 will be a wasted year” and the size of the country’s economy will end up lower than the last year. “There is nothing in the announcements today that brings back the jobs,” Chidambaram said, suggesting that the unemployment rate on November 11 stood at 6.4%.
He also said that the economy can only be resuscitated by putting money into the hands of the poor. “Unless money is put in their hands, they will not be able to contribute to the revival of demand and the consequent revival of the economy.”
Notably, on Wednesday, the Reserve Bank of India in a bulletin said that the economy is likely to contract by 8.6% in the second quarter (July-September), resulting in a “technical recession” for the first time in India’s history.
Chidambaram’s party compatriot Jairam Ramesh picked on the central bank’s observation to suggest that the finance minister announced the measures in order to cover up the negative news. “The real thing is that this year [is] the GDP will drop. It is time to assess the damage instead of doing headline management,” Ramesh said, according to PTI.
Chidambaram also criticised the finance minister for citing the central bank’s observation that the growth rate will turn positive in the third quarter (October to December). “Nearly 1.5 months of the third quarter is already over and there are no signs that the growth rate will turn positive,” he said.
On Thursday, Congress leader Rahul Gandhi had also targeted the Narendra Modi government for the economy’s poor state. “India has entered into recession for the first time in history. Mr Modi’s actions have turned India’s strength into its weakness,” he tweeted.