Expanding credit will not raise consumption: Congress

FinMin’s measures will not tackle unemployment, inflation, says principle opposition party

The Congress on Monday, reacting to Finance Minister Nirmala Sitharaman’s fresh economic announcements, said expanding the credit opportunities wont help in generating new demand or tackle growing unemployment.

“Credit guarantee schemes have not guaranteed revival since India’s economic downturn. FM @nsitharaman needs to realise that doing the same thing over and over again delivers headlines but little else,” former Union minister Jairam Ramesh tweeted.

At a virtual press conference, Congress spokesperson Gourav Vallabh said the government’s measures will not tackle low demand, low GDP, high inflation and unemployment.

“There is only one way to revive our economy. We have to generate new demand and for that to happen, we need to increase consumption. Ours is not a export driven but a consumption driven economy. Nearly 55% of our GDP is made up of consumption. And for consumption to go up, we need to put money in the hands of the people,” Mr. Vallabh said, adding the various sectors of the economy need “hand holding and not expansion of credit”.

Mr. Vallabh, addressing a joint press conference with Aman Panwar, said various studies have shown that India’s middle class has shrunk by 3.2 crore and about 7.5 crore people were pushed below the poverty line in 2020.

“As per the Centre for Monitoring Indian Economy (CMIE), close to 97% of Indians became poorer during the last year. It is clear that both lives and livelihood have suffered badly. But the big issue is that the BJP government has left the people alone in this fight and doesn’t seem to be bothered at all,” the Congress spokesperson.

The Congress also questioned that government’s affidavit in the Supreme Court that said that the government cannot pay ex-gratia payment to all those who died from COVID-19.

The principal Opposition party claimed that the government had earned ₹4 lakh crore from excise duty on petrol and diesel last year and, at least, 10% of this amount needs to be spent on creating a COVID compensation fund.

“The Congress party demands that the government include COVID-19 like other natural disasters and provide compensation of ₹10 lakhs to the families of the deceased… A government that can’t provide ₹10 lakh to the families of the deceased has no right to rule,” Mr Vallabh said.

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