The Congress hit out at the NDA government at the Centre, saying the economy has taken a turn for the worse, and for the first time it has gone into a recession.
The party cited the RBI report which noted that in the second quarter of 2020-21, economic growth rate was expected to decline by -8.6 per cent—a negative growth rate in two successive quarters is recession.
In a press conference in the national capital, after Finance Minister Nirmala Sitharaman announced third big tranche of economic stimulus, Congress leaders P. Chidambaram and Jairam Ramesh said the stimulus was an attempt at headline management in order to turn focus away from the negative news.
Former finance minister Chidambaram said as these rates are calculated y-o-y (year-on-year), it must be remembered that in Q1 of 2019-20, the growth rate was 5.2 per cent and in Q1 of 2020-21 it was -23.9 per cent. Similarly, in Q2 of 2019-2O, the growth rate was 4.4 per cent and in Q2 of 2020-21 it is expected to be -8.6 per cent.
“There is nothing to be pleased about these rates. These rates mean that we are still unable to catch up with even the tepid growth rates recorded in 2019-20. I am afraid the remaining quarters of 2020-21 will also record negative growth rates. It is therefore surprising that the finance minister should quote the RBI as predicting that the economy will register a positive growth rate in the third quarter. Nearly one-and-a-half months of the third quarter is already over and there are no signs that the growth rate will turn positive in the third quarter,” Chidambaram said.
Ramesh pointed out that if one were to look at the RBI report, it was not just the growth rate which was going down, but the GDP itself is declining. “This is a matter of grave concern.”
“The Atmanirbhar Bharat package announced today is just an attempt to shift people focus away from these serious developments. It is like a Diwali dhamaka. But how far these announcement would be impactful, only time will tell,” Ramesh said.
The former minister said the 15 Finance Commission report, which will be tabled in Parliament ahead of the Union Budget, will have indications that it will badly impact the finances of the states. “Until the finances of the state are improved, the economy will not improve.
Chidambaram demanded that the government should initiate steps to revive the economy. He listed four of them: farmers must get fair and remunerative prices for their produce; NYAY scheme must be implemented to put money in the hands of poor; create new jobs as the unemployment rate on
stood at 6.4 per cent; more money should be devolved on the states.
“The economy continues to be in dire straits and the government does not have a plan to revive the economy. On the other hand, it is busy deflecting the attention of the people from the economy and managing the headlines about the economy,” Chidambaram said.