Budget 2020: Modi Govt In Denial, Has Given Up On Reviving Economy, Says P Chidambaram

Former Finance Minister P Chidambaram has slammed the Union Budget 2020 accusing the Narendra Modi government of being in denial over the state of the Indian economy. Chidambaram criticised Nirmala Sitharaman's speech saying there was no memorable idea or statement in it. P Chidambaram said that the government seems to have given up on reviving the economy.

He said, "We have just heard the longest Budget speech delivered by a Finance Minister in recent years. It lasted all of 160 minutes... I am at a loss to understand what was the message intended to be conveyed by Budget 2020-21. I am also not able to recall any memorable idea or statement in the speech."

"The government has given up on reviving the economy or accelerating the growth rate or promoting private investment or increasing efficiency or creating jobs or winning a greater share of world trade," he said.

There is nothing in the Budget that leads one to believe that growth will revive in 2020-21 and the claim of 6 to 6.5 per cent growth next year is "astonishing and even irresponsible", the former finance minister said at a press conference.

"There were multiple themes, segments and programmes, leaving the listener dazed and confused," he said.

Chidambaram described the Budget as a laundry list of old programmes. "If the ongoing programmes have failed the people, how can throwing more (or in some cases less) money into the ongoing programmes change anything?" he asked.

"The BJP government has been identified with debatable positions like self-reliance, protectionism, control, trader-bias and aggressive taxation. The Budget affirms those positions. The government does not really believe in a market economy, competition or higher trade intensity," he said.

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Chidambaram said the government "does not believe" in reforms and certainly not in structural reforms as Finance Minister Nirmala Sitharaman has outrightly rejected every reform idea in the Economic Survey.

Chidambaram said that the Chief Economic Adviser must be a very disappointed man.

The Indian economy is demand-constrained and investment-starved, and the finance minister has not acknowledged these two challenges, he said.

"You did not ask for such a budget and you did not deserve such a budget for voting the BJP to power. But you have to live with it until the government is forced to revisit it, as it did in 2019," Chidambaram said.

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Finance Minister Sitharaman announced cuts in personal income tax, extended tax benefits for affordable housing and gave relief to companies on payment of dividend in the Union Budget as the government looked to boost consumption to bring the economy out of the worst slowdown in 11 years.

"Food subsidy has been reduced,  Fertilizer subsidy has been reduced. Petroleum subsidy shows a marginal increase because of anticipated increase in oil prices. It appears that the people will not get any relief on the price front. Please remember that CPI inflation is over 7 per cent and food inflation is over 10 per cent," he said.

"The Finance Minister failed miserably on marksmanship. In 2019-20 (the current year), she failed to meet any of the key BE targets — nominal GDP growth, fiscal deficit, net tax revenue collection, disinvestment revenue or total expenditure. There is no assurance that she will meet the targets set for 2020-21," Chidambaram said. 

Addressing the people of India, Chidambaram said: "You did not ask for such a Budget and you did not deserve such a Budget for voting the BJP to power.  But you have to live with it until the government is forced to revisit it as it did in 2019."