New Delhi: Former finance minister P Chidambaram on Tuesday cautioned the government against taking inflation lightly, saying every family is hit hard by price rise and asked why the RBI has not reduced bank rates for 13 months if it was low as claimed.
Initiating discussion on the Union Budget 2024-25 in the Rajya Sabha, the senior Congress leader also asked if the proposed employment-linked incentive (ELI) has been mooted as the existing production-linked incentive (PLI) schemes have "failed" to generate employment while mocking Finance Minister Nirmala Sitharaman for "lifting" ideas from the Congress manifesto for the ELI scheme.
He said the finance minister in her Budget speech "dismissed the subject in just 10 words".
"Is inflation such a trivial subject (that) you can deal with it casually and dismiss it in 10 words?" he asked, arguing that in the interiors and hinterland of India, "inflation is much higher" than data collected mostly from towns and villages that are along national and state highways and district roads.
Chidambaram also took exception to the statement by the Chief Economic Advisor in the Economic Survey that India's inflation continues to be low, stable and moving towards the 4 per cent target.
"It has been moving for the last four years. When will it arrive at the 4 per cent target?" the Congress leader asked.
He further said, "I think what the Chief Economic Advisor said in the Economic Survey is the injury, and the honourable finance minister dismissing the subject in 10 words is adding insult to injury".
He argued that if inflation is low, stable and moving towards the 4 per cent target, why has the RBI not revised downward the bank rate fixed in June 2023? "Bank rate is a good measure of where inflation is moving. If inflation is moving towards the 4 per cent target, why is the RBI keeping the bank rate at 6.5 per cent for the last 13 months? Why is the MPC, the Monetary Policy Committee, not willing to revise it downwards?" Chidambaram said.
He asserted that inflation is a humiliating situation because every family is hit by inflation. "I warn this government, you are taking inflation not so seriously".
The results of the last set of by-elections in which the INDIA bloc won 10 out of 13 seats was a "punishment (and) warning administered" by the people to the NDA for high inflation, he said.
"If you don't take inflation seriously, you will be punished more. If you want to suffer, you are welcome to suffer the punishment," Chidambaram added.
Highlighting unemployment as the biggest challenge, he cited several instances of people applying in excess for limited vacancies across different states, and lamented that the RBI, about two-three weeks ago, said: "There is no jobs crisis in India".
"Why didn't anyone from the minister or any officer stand up and say we reject the statement? RBI is supposed to be cautious, conservative and neutral, but you are cautious, you are conservative, and you are not neutral at all," Chidambaram alleged.
On the proposed ELI, he said, "Earlier, there was a production-linked incentive. When you introduced the ELI, it must be for some reason. And I suspect the reason was that the PLI scheme did not create the kind of jobs that you wanted to create".
While acknowledging ELI is an interesting idea, he expressed doubt that it will be able to place 290 lakh people under it.
It should not turn out to be another election "jumla' like your 2 crore jobs a year", Chidambaram said.
He also questioned the government's methods of calculating economic growth, saying the claim of high growth has not been felt by the common people on the ground.
On the tax relief proposed for individuals in the Budget, he said the benefit will be only for only 2-3 crore people and asked what relief has been given to those in irregular jobs and daily labourers.
Highlighting the income disparity across the population, he also said India continues to languish in the global hunger index.
"The action that the government has taken, namely giving free food grain to 81 crore people is a tacit admission that on the hunger index we are very very low...your own action shows that people cannot afford food," Chidambaram said.
The senior Congress leader also attacked the government for destroying federalism by picking and choosing among states for grant of relief.
"I don't grudge at all that you are giving relief to Andhra Pradesh, or Bihar, but what about the other states? We are a federal country. This is the death knell of federalism if you pick and choose among states. You are the Union of India, you are the Union government, you are the government of all the states. You cannot pick and choose one state and deny relief to another state," Chidambaram asserted.
Taking part in the discussion, Radha Mohan Das Agrawal (BJP) refuted the opposition's allegations and said in the ten years of NDA rule under the leadership of Prime Minister Narendra Modi several policies and measures have been taken for the welfare of the poor, youth, women and farmers.
Terming the Budget as "anti-federal", Jawhar Sircar of the All India Trinamool Congress alleged that it has declared an economic war on West Bengal.
NR Elango of the DMK and Sujeet Kumar of BJD expressed disappointment, claiming that Tamil Nadu and Odisha were neglected in the Budgetary proposals.
Sanjeev Arora of the Aam Aadmi Party said that the only way forward is to increase budgetary allocation on healthcare, suggesting that it be raised to 2.5 per cent of the GDP.
Union Budget 2024 LIVE | Making a record for any Finance Minister, Nirmala Sitharaman presented her 7th consecutive Union Budget on July 23, 2024 under the Modi 3.0 government. This Budget brought tax relief for the middle class, while focusing on jobs through skilling, incentivising employers. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.