Economy cause for concern as foreign exchange reserves dwindle: Congress
Udaipur, May 14 (IANS) Congress on Saturday said the state of India’s economy is a cause for extreme concern as foreign exchange has dried up, calling for an overhaul of economic policies.
Stating that in the ongoing ‘Chintan Shivir’, the state of the economy figured prominently in the deliberations, the Head of the Economy Committee, P. Chidbambaram, told a press conference: “There are 60 members in our group. Yesterday, 37 members expressed their views for four hours. Discussions will continue today and tomorrow.
The party concluded that the state of the Indian economy is extremely worrying. A slower growth rate has been the hallmark of the current government for the past eight years. The post-pandemic recovery has been indifferent and hesitant. Growth estimates for 2022-23 have been lowered from time to time over the past five months.”
He said inflation had reached unacceptable levels and threatened to rise further. WPI inflation is 14.55% and CPI is 7.79%.
“The government is actually fueling rising inflation through its bad policies, especially high taxes on petrol and diesel, high administered prices and high tax rates on GST,” Chidambaram said.
The party, in its deliberations, said the employment situation has never gotten worse. The labor force participation rate (LFPR) is at a historic low of 40.38% and the unemployment rate is at 7.83%.
“We reiterate our accusation that social services expenditure as a proportion of total expenditure has fallen to an average of 5% (in 8 years) from an average of 9% in the 10 years between 2004 and 2014,” he said. -he adds.
Chidambaram said the external situation has added to pressures on the economy and the government seems at a loss on how to deal with these developments, as: “22 billion dollars have left the country in the last seven months. Foreign exchange reserves have run out. of $36 billion. The exchange rate stands at 77.48 rupees per dollar, the highest ever recorded.
He said the Congress-led government ushered in a new era of liberalization in 1991. The country reaped enormous benefits in terms of wealth creation, new businesses and entrepreneurs, a huge middle class, millions jobs, exports and lifting 27 crore out of poverty over a 10 year period. After 30 years, it is estimated that given global and national developments, there may be a need to consider an overhaul of economic policies.
The party said the redefinition of economic policies must also address the issues of rising inequality, extreme poverty among the poorest 10% of the population, India’s ranking in the hunger index in the world 2021 (101 out of 116 countries) and evidence of nutritional deficiency in women and children and a full review would also be warranted by health and education outcomes as revealed by the annual report on the State of Education 2021 (ASER 2021) and the National Family Health Survey-5 (NFHS-5).
Over 400 Congress members and women gathered in Udaipur to reflect on the state of the country, the political situation, the state of the economy, the role of political parties, the organizational strengths and weaknesses of the Congress party , among other issues.