Borrow, spend & even print money: Chidambaram

After the latest GDP estimate, former finance minister P Chidambaram has said “if 2021-22 should not go the same way as 2020-21 did”, the government must “wake up, admit its errors of commission and omission, reverse its policies and heed the advice of economists and the opposition”.Borrow and spend, and even print money to reboot the economy, Chidambaram said while reiterating demands for measures such as strong dose of stimulus, fiscal expansion and direct cash transfer. He asked finance minister Nirmala Sitharaman to care to listen to similar proposals coming from chambers of commerce and industry and experts.Rueing India’s first negative annual growth since 1979-80, Chidambaram said at the AICC briefing on Tuesday, “2020-21 has been the darkest year of the economy in four decades. The performance in the four quarters of 2020-21 tells the story. The first two quarters witnessed a recession (-24.4% and -7.4%). The performance in the third and fourth quarters did not herald a recovery. The estimated rates of 0.5% and 1.6% were due to a very low base of 3.3% and 3% in the corresponding quarters of the previous year. Besides, these rates come with a number of caveats.”Chidambaram argued the major impact of the pandemic apart, the current state of the economy has been “compounded by ineptitude and incompetent economic management of the BJP-led NDA government” which rebuffed “good advice by distinguished economists and renowned institutions” and “ignored” world-wide experience and suggestions on fiscal expansion and cash transfers have been turned down even as “hollow packages like Atmanirbhar have fallen flat”.He chided Sitharaman and her chief economic advisor for the way “they began to sell the story of a recovery”, after the first wave of the pandemic appeared to subside last year, and how “they saw ‘green shoots’ when no one else did” and how “they predicted a V-shaped recovery”. He added, “it was a false story and we had expressed our strong reservations and warned there were no signs of a recovery. We had pointed out that what the economy needed was a strong dose of stimulus, including increased government expenditure, direct transfers of cash to the poor and liberal distribution of free rations. Our pleas fell on deaf ears, and the result is a negative growth of 7.3%.”

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