Real GDP would not touch USD 5 trillion by 2024/25: Chidambaram

The NDA government has not defined whether the USD 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. 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.

Chidambaram was replying to a query on the government's ambitious target of USD 5 trillion 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 trilllion 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.

Chidambaram, who lashed out at the Union Budget for allegedly failing to lead the economy on the path of progress and job creation, alleged that the Modi government was like a helpless doctor who failed to diagnose the illness of a patient and treat him effectively.

"Altogether, the bottom line is we have a patient who is extremely ill. Doctor has proved himself incompetent. Diagnosis of the doctor is hopelessly wrong," he said.

People who diagnosed the illness correctly like Dr Arvind Subramanian, former Chief Economic Adviser, were allowed to go from the government, he said.

"Not having diagnosed the illness of the patient, the doctor is helpless. The least the doctor can do is to say...I am sorry. We made mistake, will Dr Manmohan Singh come and advise us," he said.

Asked whether it is true that the country spends one per cent GDP to keep 950,000 troops in Kashmir, he said there were more troops there than necessary.

"I think we are keeping many, many more troops in Kashmir than I would ever accept as necessary. I think it is wrong. We should thin out our troops deployment in Kashmir. More than that, I think we should give back freedom to the people of the Kashmir valley," Chidambaram said.

Slamming the centre for invoking the Public Safety Act against former Jammu and Kashmir chief ministers Mehbooba Mufti and Omar Abdullah to keep them in detention for upto a further two years, he said "there cannot be a greater outrage, a greater assault on liberty than what they have done. I think all of us should collectively pray for that the freedom of the people of Kashmir, the 75 lakh people of Kashmir valley, is restored," he added.