Financial stimulus in Congress’s wish list for budget

NEW DELHI: On the eve of Parliament's budget session, the Congress on Thursday laid out its expectations from Finance Minister Nirmala Sitharaman, with a demand to provide fiscal stimulus kick off the economy, even belated, give direct cash transfer to 20-30 per cent of the families at the bottom of economy at least for six months and reduce tax rates, especially GST and indirect taxes on petrol and diesel.

Addressing a Press conference here, former finance minister P Chidambaram squarely blamed the govt for pre-COVID economic slowdown and COVID-era economic mismanagement, and said said the Congress’ wish list for the Union Budget 2021-2022 is "completely doable." He released a 10-point "To Do List" for the finance minister, calling for revival of the sagging economy and significant boost to health and defence expenditure.

COVID CESS: "We recognise that there are some imperatives that fall outside economic management such as increase in expenditure on health infrastructure and increase in defence expenditure. We will support significant increase under both heads,” the former finance minister said refusing to comment on whether the Congress would support the proposed COVID cess the govt is mulling.

"Cess on whom and cess on what? Once we know that, we will respond,” Chidambaram said a further cess on petrol and diesel, which are already highly priced, would not be advisable.

The former finance minister said Sitharaman had the distinction of presiding over the first recession in four decades. "The economy is in a recession. The recovery will be slow and painful, and the rate of GDP growth in 2021-22 (in constant prices) will be modest — no more than 5 per cent,” Chidambaram said listing potential solutions “should the Government care to heed.:

Among Congress suggestions for economic revival are — impart a large fiscal stimulus to the economy, even belated; such a stimulus alone will put money in the hands of the people and stimulate demand.

Chidambaram also called for formulation of sector-specific revival packages for telecommunication, power, mining, construction, aviation, tourism and hospitality; review of amendments to tax laws that have been widely viewed as tax terrorism and comprehensive and time-bound review of the regulations made by the RBI, the SEBI and other regulatory agencies that have been widely regarded as over-regulation.

On agriculture, the former finance minister said: “Agriculture will grow at a satisfactory rate if the government does not arbitrarily disrupt the sector with anti-farmer laws and retrograde import/export policies for agricultural produce.”

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Free Press Journal