Addressing the media at Congress’ Chintan Shivir in Udaipur, former Union Finance Minister P Chidambaram, who heads the camp’s economy panel, called for economic policies to take forward liberalisation and “remove inequalities and extreme poverty”.
The five-year period to compensate states for any loss of tax revenue after the implementation of the Goods and Services Tax will end in June this year.
“In view of the deteriorating financial condition of the states, the period of compensation should be extended by at least three more years,” Chidambaram said.
Describing the current state of the economy as “a matter of extreme concern”, Chidambaram said, “Inflation has risen to unacceptable levels. WPI stands at 14.55% and CPI at 7.9%. Petrol and diesel have higher taxes and higher GST tax rates. The job situation has never been this low, with a job participation rate of 40.38 per cent and an unemployment rate of 7.83 per cent.”
Dismissing inflation rates as a result of the Russo-Ukraine war, the former minister argued, “This is an excuse and a trend of high inflation was observed in the pre-Ukraine war. The Ukraine war has compounded our problem.” Chidambaram blamed the Reserve Bank of India (RBI) for being behind the curve.
The former minister, who was one of the key players in economic liberalization in 1991 along with Manmohan Singh and PV Narasimha Rao, insisted on a policy reset, which would be part of the Congress’s economic vision for the 2024 elections.
“Congress started new liberalisation. Thirty years have passed and we now believe that the time is right for a re-evaluation of economic policies and a comprehensive review of the Centre-State financial distribution. Changes in economic policies must address new challenges, social inequalities and extreme poverty.”
first published:May 14, 2022, 12:40 p.m.