The Indian economy was in the doldrums even before the Covid-19 crisis and the government’s response following the pandemic has only made the situation worse, Congress leader Adhir Ranjan Chowdhury said on Friday. Participating in the debate on Supplementary Demands for Grants 2020-21, Chowdhury, leader of the Congress in the Lok Sabha, said the stimulus package announced to help the nation tide over the crisis was a ”pitiful 1.7 per cent of GDP”.
”The economy was in doldrums when Covid-19 pandemic hit us in March. The government despite our plea, did not take corrective measures. ”It refused to accept that demonetisation was a huge blunder, it refused to accept our advice for a simple GST,” he said.
Chowdhury further said the government did not transfer Rs 5,000-Rs 7,500 to the poorest 50 per cent of the Indian population, as suggested by Congress leader Rahul Gandhi. ”The Modi government’s response to the pandemic-affected economy made the situation worse,” he asserted.
Chowdhury alleged that the government made a false claim that it has provided 10 per cent of GDP as fiscal stimulus. ”It was big lie. The stimulus imparted by the Modi government was a pitiful 1.7 per cent of GDP,” he said.
In May this year, the government had announced a Rs 20.97 lakh crore economic package, which included RBI’s Rs 8.01 lakh crore worth of liquidity measure. ”The Rs 20 trillion Atmanirbhar Bharat package announced in May has a fiscal cost ranging between Rs 1.5 trillion to Rs 2 trillion…This is nothing but a bluff that the government has tried to pull off,” the senior Congress leader argued.
Raising the issue of GST compensation to states, Chowdhury said the Centre is not giving the compensation money to the state governments and asking them to borrow funds from the RBI. ”It has been a complete breach of trust by the Centre…The central government is profiteering from the misery of states,” he said.
Noting that the Indian economy has contracted by about 24 per cent in the first quarter of this fiscal, he wondered how the country will achieve the target of becoming a USD 5 trillion economy by 2024. ”India’s GDP estimate for fiscal 2020-21 by various national and international agencies…has painted a bleak picture, ranging from minus 5 to minus 11.5 per cent…tell me, what is the fate of the USD 5 trillion economy (target) by 2024,” he asked.
The government is clueless or does not want to invest in infrastructure, Chowdhury alleged, adding that ”greenshoots won’t come if the government won’t spend on infrastructure.” Opening the debate on the Supplementary Demands for Grants, BJP’s Jayant Sinha said in February when Budget 2020-21 was tabled, the finance minister had informed that the total spending is going to be Rs 30.42 lakh crore. ”Through this Supplementary Demands for Grants, the government has introduced Rs 2.35 lakh crore. Of this, Rs 1.66 lakh crore is incremental expenditure. This is 5.4 per cent of Rs 30 lakh crore,” he said.
For the health sector alone, Rs 63,000 crore out of the Rs 2.35 lakh crore has been allocated, he pointed out. Sinha said India is going through a very strong recovery.
”High frequency data indicators are telling that in many sectors of the economy we are working at pre-COVID level,” he added. The former union minister also noted that while most other developing countries’ currencies depreciated during the pandemic, the rupee appreciated.
DMK’s Dayanidhi Maran said the Modi government has not undertaken any reforms in the last six years. ”The middle class has got 6 years of lip service,” the former union minister said.
Trinamool Congress MP Saugata Roy said seeds for economic disaster were sown much before the outbreak of the coronavirus pandemic. He said demonetisation and botched implementation of the Goods and Services Tax (GST) were responsible for the economic slowdown, which got further aggravated by the sudden lockdown to check spread of Covid-19.
Stating that the fiscal deficit is increasing, the economy is shrinking and unemployment is rising, Roy said, ”The Finance Minister needs to show a way out of the tunnel.” He also demanded that the Centre release the GST compensation fund to help states fight the menace of the pandemic. PV Midhun Reddy (YSRCP) too urged the central government to release the GST compensation funds which are badly needed by the state.
He also reiterated the demand for granting special status to Andhra Pradesh and fulfilling all commitments made to the state at the time of bifurcation. Reddy also said the collegium system for appointment of judges in higher judiciary should be revoked.
Shiv Sena member Arvind Sawant demanded that the tax benefit which is available to the PM-CARES Fund should also be extended to the Maharashtra Chief Minister’s Relief Fund for Covid-19.