New Delhi: The Congress party said Saturday that it was time to “contemplate a reset of economic policies” of the country, 30 years after a government led by the party enacted its landmark liberalisation policy 1991.
Senior Congress leader and former finance minister P. Chidambaram was addressing a press conference at the Congress party’s mega brainstorming session called the ‘Nav Sankalp Chintan Shivir’. Thirty-seven members who were part of the Shivir’s economy panel held a four-hour session on the first day of the three-day event Friday, Chidambaram, a former finance minister under Prime Minister Manmohan Singh, told the press.
Chidambaram said that a reset of the country’s economic policies wouldn’t be a “step back from liberalisation, but a step forward post-liberalisation”.
“A Congress-led government ushered in a new era of liberalisation in 1991. The country has reaped enormous benefits in terms of wealth creation, new businesses and new entrepreneurs, a huge middle class, millions of jobs, exports and lifting 27 crore people out of poverty during a 10-year period,” he said. “After 30 years, it may be necessary to contemplate a re-set of the economic policies.”
He also said there was a need for a comprehensive review of the fiscal relationship between the Centre and the states.
“I am confident that our deliberations over three days and the decisions that will be taken by the CWC in the days and weeks ahead will make a significant contribution to the nationwide debate on economic policies,” Chidambaram said.
The statement on an economic reset is significant given that it was a Congress government under former prime minister P.V. Narasimha Rao that ushered in economic reforms and liberalisation in 1991.
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‘Falling growth, shrinking social expenditure’
Chidambaram accused the central government under the National Democratic Alliance (NDA) of cutting back on the country’s social services expenditure.
“We reiterate our charge that social services expenditure as a proportion of total expenditure has fallen to an average of 5 per cent (in eight years) from an average of 9 per cent in the 10 years between 2004 and 2014,” Chidambaram said.
He said that India’s economic growth had slowed under the NDA in comparison with the Congress-led UPA while inflation continued at levels higher than they were during the UPA era. He also said that the Modi government was “clueless” about dealing with the economic pressures caused by external and global situations like the Ukraine crisis.
The former finance minister told the press that the central government had left state governments in a precarious position with “poorly implemented schemes like the Goods and Services Tax” in 2017.
“The consequences of the poorly-drafted and unfairly implemented GST laws brought in by the Modi government in 2017 are there for everyone to see,” he said. “It’s not just the non-BJP states that have raised this complaint. Privately, even finance ministers of BJP-ruled states have raised this concern during meetings of the GST council.”
(Edited by Uttara Ramaswamy)