The Congress on Thursday said the country's economy is in the grip of a recession and the government has no plans to revive it and is instead indulging in headline management. Senior Congress leaders P Chidambaram and Jairam Ramesh also termed the stimulus announced by the government as another move to deflect the attention of people from the bad state of the economy. "The economy continues to be in dire straits and the government does not have a plan to revive the economy. 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 at a virtual press conference.
"I don't think this government has a considered plan to revive the economy and therefore 2020-21 will be a wasted year and we will end up with the size of the economy lower than the previous year," he also said. Ramesh said the government is only indulging in headlines management to bury the fact that that there is recession in the economy.
"These are merely announcements and it is the second time that a mini budget has been announced. At least this year, its effect will not be seen," he said. Ramesh said the RBI report has said that the economy is in a recession and to hide this negative news, the finance minister has announced another stimulus.
"But the real thing is that this year, the GDP will drop. It is time to assess the damage instead of doing headline management," he said. He also lamented that the finances of states are going to be even more delicate and will have a negative effect on the country.
Chidambaram said, "There is nothing in the announcements today that brings back the jobs." He said it is surprising that the Finance Minister should quote the RBI as predicting that the economy will register a positive growth rate in the third quarter. The former finance minister said nearly 1.5 months of the third quarter is already over and there are no signs that the growth rate will turn positive in the third quarter. Chidambaram said the Congress has repeatedly emphasised the steps that need to be taken to revive the economy and these include putting money into the hands of the poor and marginalised. He said farmers must get fair and remunerative prices for their produce, as only a small fraction get the MSP.
The recent farm laws, he said, have put even that in jeopardy and the government has done nothing to ensure that farmers get fair prices. Chidambaram said the very poor are outside the formal economy and there are millions who have lost their jobs and livelihoods. "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. It is absolutely necessary that a scheme like NYAY must be implemented," he said. The former finance minister said as far as the formal economy is concerned, the government has done nothing to bring back the jobs that were lost or to create new jobs and the unemployment rate on November 11 stood at 6.4 per cent.
"It is feared that state governments will cut their capital expenditure by nearly Rs 2.7 lakh crore. The Centre is starving the state governments of funds and doling out measly sums of money. Unless more money is devolved on the states, the states will curtail capital expenditure in 2020-21 and the revival of the economy this year will be a pious wish," he also said.
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