Chidambaram pitches measures to boost demand & revive economy, advises Centre to borrow

Amid India's GDP contracting by 23.9%, senior Congress leer P Chidambaram on Sunday suggested measures to stimulate demand and revive ecomy. First, he urged Centre to transfer some cash to poorest 50% of families. This has been Congress Party's consistent demand to boost consumption. While Union government has alrey extended free ration scheme- Prhan Mantri Garib Kalyan Anna Yojana till vember, Chidambaram opined that food grains should be offered to all families irrespective of ir ecomic status.

According to him, Centre should start massive public works and increase spending on infrastructure projects. He stated that huge food grain stock could be used to pay ws in kind to workers. Moreover, he called upon NDA government to recapitalize banks enabling m to lend more. Rajya Sabha MP ded that states should be paid ir GST compensation dues. 

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Options to raise money

While ackwledging that his recommendations will require a lot of money, Chidambaram vised Centre to borrow liberally. For instance, he pointed out that Fiscal Responsibility and Budget Manment rms could be temporarily relaxed. ditionally, he requested government to accelerate disinvestment. senior Congress leer contended that money could be raised by borrowing from International Monetary Fund, World Bank and Asian Development Bank. He mentioned that monetising part of deficit was ar option that Centre could consider. 

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Centre offers explanation

All sectors barring agriculture have recorded negative GDP growth during April-June quarter. India is among ecomies worst hit by COVID-19 pandemic. Elaborating on state of ecomy,  Centre ted that restrictions were imposed on n-essential ecomic activities and movement of people from March 25 to contain spre of COVID-19. It maintained that this h an impact on ecomic activities as well as data collection mechanisms.

Mentioning that timeline for filing statutory returns h been extended, it revealed that usual data sources were substituted by limited alternatives like GST and interaction with professional bodies. In this background, Union government hinted that GDP estimates are likely to undergo revision in due course. Meanwhile, GST estimates for July-September quarter shall be released on vember 27. 

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