Government has failed to stimulate demand: Chidambaram

P Chidambaram

Congress leader P Chidambaram told the Rajya Sabha on Thursday that the government has failed to stimulate demand for growth in the country and the GDP will go back to the figures of three years ago because of "incompetent economic mismanagement".

He claimed that the budget for 2021-22 has failed as even a small amount of cash transfer has not been given to the poor and the rations are not being continued with.

"Every economist in the world has said we have to stimulate demand and the best way to stimulate demand is to put money in the hands of people. This government has failed on that account. I repeat the charge. You are still not learning the lessons of the last 36 months. I am afraid that as a result of your not learning the lessons, another 12 months will be lost and the poor will suffer and suffer greatly," the former finance minister said in the Upper House of Parliament.

He said the GDP (Gross Domestic Product) in 2004-05, in constant prices, was about Rs 32.42 lakh crore and when the Congress-led UPA demitted office in 2013-14, it was a little more than three times at Rs 105 lakh crore.

"Since then what has happened? In 2017-18, it was Rs 131 lakh crore. In 2018-19, it crept up to Rs 139 lakh crore. In 2019-20, it was a slower crawl to Rs 145 lakh crore and in 2020-21, the year that is about to end, the first half is about Rs 60 lakh crore and the year may end at about Rs 130 lakh crore, which means we are back to where we were in 2017-18," Chidambaram said.

He alleged that the country has witnessed three years of "incompetent economic mismanagement".

"The honourable finance minister took exception to my using the word incompetent. I cannot use a harsher word in Parliament. I am using the mildest word available to me. Three years of incompetent economic mismanagement means that at the end of 2020-21, we will be exactly where we were in 2017-18," the Congress leader said.