The National Democratic Alliance government has not defined whether the 5 trillion dollars economy it aims to achieve is real GDP or nominal, senior Congress leader P Chidambaram said on Saturday and claimed real GDP would not touch the figure at the current growth level by 2024 or 2025.
P Chidambaram, who spoke on the Union Budget at a meeting organised by the party here, hit out at the government for allegedly proving to be incompetent in managing the economy.
"Firstly, the Modi government has still not defined whether 5 trillion dollars is real GDP or nominal. Secondly, while Modi keeps on saying 2024, the economic survey, in the introduction, the goalpost has been shifted from 2024 to 2025. Be that as it may, at the current level of growth, real GDP will not touch 5 trillion dollars either by 2024 or 2025," the former Finance minister said.
P Chidambaram was replying to a query on the government's ambitious target of 5 trillion dollars economy.
Interacting with the audience, he said the NDA government should not "clutter" the tax structure by seeking to introduce separate systems, one giving exemptions and other not.
Asked by a member of the audience whether there is a possibility of the government withdrawing various tax exemptions leading to the common man not having options to save money and tax, he felt that there was still confusion within the government on the matter.
"Even if all the income tax payers opt for the new system, the maximum benefit will be Rs 40,000 crore.What is Rs 40,000 crore when India''s GDP is almost 2.7 trillion dollars," he said.
The impact would be so minimal that it won't make a big difference, he claimed.
Noting that the IT exemptions are savings, he said their withdrawal would lead to a decline in the savings habit which is not good for the country.
"More than anything else, I don't think the tax structure should be cluttered like this. You don't have anywhere a tax structure, system A, system B, system A for exemptions...without exemptions. I think it is cluttering up tax system. I would not have done it. The sooner they clarify what their intention is, the better," he said.
On the proposed disinvestment in LIC, he said there was no clarity whether the government would list or disinvest the insurance behemoth.
"Without clarity about whether they are listing or disinvesting. I cannot comment on it. But on LIC, unless they convince me why they want to disinvest, our present position is we are deeply suspicious of their motives to disinvest LIC," he said.