Ex Minister P Chidambaram has suggested measures to revive the economy which has shrunk by 23.9 per cent
Former Finance Minister and senior Congress leader P Chidambaram today tweeted a series of measures to boost consumption, including paying GST arrears to states, including raising money by borrowing to pull the country’s economy out of its sharpest nosedive on record.
Among the measures recommended to stimulate demand, or consumption, to drive production and revive the economy, Mr Chidambaram said the government must transfer cash to the poorest 50 per cent families, use food grain stock to pay wages in kind, increase spending on public works, and re-capitalize banks to enable them to lend again.
“All of the above will need money. Borrow. Don’t hesitate,” he suggested and shared ways to raise money in the next tweet.
Here are are some concrete steps to raise money:
1. Relax the FRBM norm and borrow more this year
2. Accelerate disinvestment
3. Use the offer of USD 6.5 billion by IMF, WB, ADB etc
4. As last resort, monetise part of the deficit
— P. Chidambaram (@PChidambaram_IN) September 6, 2020
Mr Chidambaram has been urging the government to take concrete measures to revive the economy and has called upon it to provide GST compensation to states, as promised to them at the time of GST implementation.
The veteran leader had earlier said the country was looking at a “long, unending tunnel” if the government did not take corrective measures to help the economy turn a corner.
He had said that every other sector in the economy had “declined sharply” and that while that did not surprise him, it should be “a matter of shame to a government that did nothing, literally nothing, to cushion the fall by taking suitable fiscal and welfare measures”.
“This is the time to borrow, spend, boost demand, put money in the hands of the poor so that consumption increases,” the former minister had said earlier sharing his prescription for economic recovery.
In an interview to NDTV, Mr Chidambaram had questioned Chief Economic Adviser KV Subramanian’s claim after the shock GDP data that the country had suffered due to the lockdown and would see a better performance in the coming quarters on the back of a “V-shaped recovery” in various sectors.