India Today Conclave: P Chidambaram credits govt for debt management, criticises Covid measures

India Today Conclave: P Chidambaram credits govt for debt management, criticises Covid measures

Former finance minister and Congress leader P Chidambaram credited the BJP-led NDA government for its “single-minded focus” on containing deficit and debt management, but remained critical of the Centre’s handling of the Covid-19 pandemic.

Speaking at a session during the India Today Conclave 2023, Chidambaram said, “I would give credit to this govt for its single-minded focus on containing the deficit and debt management.” Chidambaram’s response came to a question about whether he credited the ruling government for any area of economic handling after it came to power in 2014.

Chidambaram explained that debt management is the “single-most important factor” which affects credit, inflation and ability to spend.

“All I am saying is this is our government, whether we voted or not, it is our government. We have to give credit for whatever the government is doing and I have no hesitation in giving credit to where it is due, but all I am pointing out is there is so much more to be done,” P Chidambaram said.

“A prime minister with so much energy, drive and control over his party can do so much more. Instead of that, we are talking about a non-interview and documentary. Why are they wasting time on those things?” Chidamabaram questioned.

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Critical of govt’s Covid relief measures 

On the other hand, P Chidambaram was critical of the relief measures announced by the government during the peak of the Covid-19 pandemic in India. He said the BJP-led NDA government was wrong in not providing a bigger stimulus package during the pandemic.

“The government was wrong in not doing a fiscal stimulus. That’s why three crore people had to migrate from other cities and states, back to Bihar and Uttar Pradesh,” he said, highlighting the plight faced by migrant labourers during the peak of the Covid-related lockdowns.

Neelkanth Mishra, Co-head of Asia Pacific Strategy, India Equity Strategist for Credit Suisse and part-time member of the PM’s Economic Advisory Council, was also a part of the session.

Mishra defended the government’s handling of the Covid-19 crisis, and said announcing a large stimulus package would have led to higher external borrowing and led to further instability. “I don’t think that would have been the right thing to do.”

He highlighted that the situation during the Covid lockdowns deteriorated for the poor due to a consumption slowdown, but added that the reopening of the economy has significantly improved the situation.

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“Mr. Chidambaram, you’re absolutely right that during the pandemic the poor were very badly affected, but I think the right and the more sustainable way to get them back to health is to let the sales happen. The economy naturally balances itself,” he said.

However, Chidambaram wasn’t convinced. “Neekanth and Mr. Modi are speaking about only half of India”, he said.

Counterting Neelkanth MIshra’s examples of company sales and foreign direct investment, Chidambaram said it makes sense only to the first 70 crore of India, it makes no sense to the bottom 70 crore of India.

“And even if 70 crore people of India buy and sell and go around, the country’s economy will look shiny. But what about the bottom 70 crore? Therefore, Mr. Modi neglected the bottom 70 crore and I squarely charge this government of having neglected the poor and very poor,” Chidambaram added.

“Every government has to do something. They did, but not enough. This led to massive unemployment and hunger,” the former finance minister said.

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