Senior Congress leader and former Union Finance Minister P. Chidambaram on Monday led the Opposition’s severe criticism of the government’s economic policies, saying the economy was perilously close to collapse and, with “rising unemployment and falling consumption, India is becoming poorer.”
Leading the debate on the Union Budget in the Rajya Sabha, he said the government was in denial and the economy had to be attended to by ‘competent doctors’.
Revenue shortfall
The Congress leader said the States were being cheated. “In the beginning of the current year, you promised to transfer ₹8,09,133 crore in the Budget Estimate. At the end of the year, you will transfer only ₹6,56,046 crore. There is a cut of ₹1,53,000 crore. Divide it among 30 States. On an average, every State will lose ₹5,000 crore…and the next year, you [have] promised to give ₹784 lakh crore. I don’t believe your numbers,” he said.
The economy, he said, is facing demand constraints and is investment starved. “Fear and uncertainty prevails in the country,” he added. The former Minister pointed out that government is facing a shortfall in all forms of taxes — ₹1.56 lakh crore on corporate tax, ₹10,000 crore on personal income tax, ₹30,000 crore on customs, ₹52,000 crore on excise and ₹51,000 crore on the GST. This despite “the extraordinary powers” and “all kinds of power” given to lower-level tax officials, he said.
The net tax revenue in the current fiscal was targeted at ₹16.49 lakh crore but only ₹9 lakh crore had been collected in first nine months till December 2019 and “you want us to believe this will rise to ₹15 lakh crore by March 2020?” he said.
Similarly, the expenditure in 2019-20 was pegged at ₹27.86 lakh crore, but only ₹11.78 lakh crore was spent during April-December, and by March this is projected to rise to ₹27 lakh crore.
“Today there is no money in the hands of the people and there is no incentive for anyone to invest. On the contrary, there is fear and uncertainty prevailing all over this country and under this fear and uncertainty, nobody will invest in India,” he said.
He said Arvind Subramanian, Chief Economic Adviser to the BJP government for four years, had stated that the economy is in the ICU. “I would say the patient has been kept out of ICU and incompetent doctors are looking at the patient,” Mr. Chidambaram quipped.
