'Cause of Extreme Concern': P Chidambaram on Economy at Congress' Chintan Shivir

Chidambaram called for a "comprehensive review" of policies by the central government.

P Chidambaram speaking at a Congress press conference at Rajasthan's Udaipur.

(Photo: YouTube screengrab)

Speaking at a special party briefing at Congress' three-day Chintan Shivir in Udaipur, senior party leader P Chidambaram expressed "extreme concern" over the state of the Indian economy, which is showing slower growth rates.

Chidambaram accused the government of "fuelling ruse of inflation by high taxes on petrol and diesel, and high administered prices," noting that inflation had risen to "unexpected levels" under the present government.

He opened the conference by acknowledging the loss of lives in the tragic fire near West Delhi's Mundka metro station, offering the party's "deepest and sincerest condolences."

The Shivir has over 400 party members in attendance, who have gathered to "reflect" on the state of the country, economy and the political situation. Additionally, the meet is also aimed at realising the "organizational strengths and weaknesses of the party," along with the "threats to unity, diversity and secularism," and the common people's everyday problems.

In his opening statement, Chidambaram discussed the "broad conclusions" that 37 members had arrived on after a four-hour-long discussion on the economy of India.

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He highlighted that the slower rate of growth "has been the hallmark of the present government" in the past eight years.

Calling the level of the current rate of inflation "unacceptable," he noted that the Wholesale Price Index (WPI) inflation was at 14.55 percent while the Consumer Price Index (CPI) inflation was at 7.79 percent.

Chidambaram then told the media that the current government was responsible for driving up inflation through "wrong policies," high taxes on fuel, high administered prices and high GST rates.

Speaking about jobs and unemployment, the four-time former finance minister said that the Labour Force Participation Rate (LFPR) was at a record low of 40.38 percent, while overall unemployment stood at 7.83 percent.

"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 percent in the 10 years between 2004 and 2014."

P Chidambaram at Congress' Chintan Shivir in Udaipur

Noting that external factors were also at play, Chidambaram said that they added pressure to the current state of the economy, and that the "government appears clueless" on the ways to deal with the problems.

"USD 22 billion has flowed out of the country in the last seven months. The foreign exchange reserves have depleted by USD 36 billion. The exchange rate stands at Rs 77.48 to a dollar, the highest ever," he said.

'Necessary To Contemplate a Reset of the Economic Policies': Chidambaram

Remarking on the former UPA-led government's liberalisation policy implemented in 1991, Chidambaram said that while the move brought great benefits in terms of business, job and wealth creation in 10 years, "it may be necessary to contemplate a re-set of the economic policies."

Adding to this, he emphasised that the reset must address the issues of rising inequalities, "extreme poverty", India's low position in the Global Hunger Index and malnutrition in women and children across the country.

Referring to the Annual State of Education Report of 2021 (ASER 2021) and the National Family Health Survey 5 (NFHS-5), Chidambaram said that their findings revealed that recalibrating economic policies "can influence health and education outcomes."

The Congress MP then called for a "comprehensive review" of the fiscal relations between the Centre and states, saying that the consequences of the "poorly drafted and unfairly implemented" GST laws were clear.

"The States’ fiscal position is fragile as never before and needs urgent remedial measures," he noted.

Concluding his remarks, he said that the party believed that the Indian workforce and economy needs to be prepared to adapt to the 21st Century, by introducing "greater use of automation, robotics, machine learning and artificial intelligence."