- A 24 per cent drop in GDP signaled India's worst economic contraction
- P Chidambaram called the government's relief package "a joke"
- Centre is compounding the pandemic with a man-made disaster, he says
In a sharp response to Finance Minister Nirmala Sitharaman's "Act of God" comment on the impact of coronavirus on the economy, Congress leader P Chidambaram said today: "Don't blame God for a man-made disaster."
The former Finance Minister, in an interview to NDTV a day after a 24 per cent drop in the GDP signaled India's worst economic contraction on record, also called the government's relief package "a joke".
"Don't blame god. In fact you should thank god. God has blessed the farmers of the country. The pandemic is a natural disaster. But you are compounding the pandemic, a natural disaster, with a man-made disaster," Mr Chidambaram said, asked what he would advise Nirmala Sitharaman, from one Finance Minister to another.
Nirmala Sitharaman was attacked by critics after she blamed the pandemic during a QandA on the states' demand for compensation due to GST losses: "This year we are facing an extraordinary situation. We are facing an Act of God where we may even see a contraction."
Mr Chidambaram questioned Chief Economic Adviser KV Subramanian's claim after the shock GDP data that the country had suffered due to the lockdown and would see a better performance in the coming quarters on the back of a "V-shaped recovery" in various sectors.
"I don't know if anyone takes the Chief Economic Adviser seriously. When is the last time he had a conversation with the Prime Minister? He has been predicting V-shaped recovery for months. Then he saw green shoots when the Finance Minister said it. Where are the green shoots," Mr Chidambaram wondered.
According to the senior Congress leader, every data point that Mr Subramanian relied on had been refuted by the report of the Reserve Bank of India.
Mr Chidambaram's prescription for economic recovery was that the government should either borrow heavily or monetize deficit (in common parlance, he said, print money to cover part of the deficit, which is part of the government's sovereign right).
"This is the time to borrow, spend, boost demand, put money in the hands of the poor so that consumption increases," said the former minister.
When it was pointed out that the government did come up with the "Aatma Nirbhar package" during the pandemic, based on Prime Minister Narendra Modi's motto of a self-reliant economy, Mr Chidambaram shotback: "It is a joke."
The 74-year-old said he had sat with economists to crunch the numbers after a series of announcements by Nirmala Sitharaman to ameliorate various sectors hit by the COVID crisis.
"We are looking at a long, unending tunnel. Maybe we can see a light at the end of the tunnel. But if we don't take this measure, the tunnel will be endless for the foreseeable future," he warned.