[Former Finance Minister P Chidambaram being received by Mumbai Congress President Sanjay Nirupam at Raheja Classic Club, Lokhandawala in Mumbai on Sunday. (Photo: Mohammad Omair/ummid.com)]
Mumbai: Terming the demonetisation of old 500 and 1000 rupee notes as the "biggest scam" of the year 2016, Former Union Finance Minister P Chidambaram on Sunday said the time is not far away when the government will realise its gamble.
"You first demonetise and then say we are remonetising. What is this joke?" Chidambaram said during an interaction session on the topic of 'Current Status of Indian Economy' at Raheja Classic Club, Lokhandawala in Mumbai.
Chidambaram has presented nine union budget in a span of nearly two decades, which is the highest ever any finance minister has presented.
Slamming Narendra Modi for demonetisation that damaged GDP growth from 7.6 per cent in 2015-16 year to 7.1 percent, Chidambaram said, "The country is likely to grow by 6-6.5 per cent in 2016-17 - much lower than what have been predicted by the CSO and RBI, due to the impact of note ban."
The Central Statistical Organisation (CSO) has predicted a growth rate of 7.1 per cent and RBI pegs it at 6.9 per cent for financial year 2016-17.
He said the growth rate in financial year 2017-18 will be same at around 6-6.5 per cent.
"2017-18 will not see a growth higher than what we have in 2016-17 as the world economy is not benign anymore and we have a unpredictable man sitting in the White House," he said.
"We never had any farmer suicide case in Tamil Nadu. But after demonetisation, acute distress in farm sector led to such unfortunate incidents", he said.
"Except for the government expenditure, three of the four engines of growth (private investment, private consumption and exports) are not firing at all. How can a car run on a single wheel?", Chidambaram asked.
"Lack of creation of job for the youth is dangerous, and small spark can lead to a large explosion. Resentment may be invisible but it can be a “silent killer”, Chidambaram said.
“15.2 crore indian are daily wages workers and most of them are farm labourers, and 25.5 crore are self employed and these 40 crore people had sold their little asset whatever they had, owing to demonetisation", he said.
Calling the budget "aimless and directionless", Chidambaram said Arun Jaitley did not make any revised estimate of direct tax collection for 2016-17 and has kept both personal Income Tax and Corporate Tax receipts at the same level to the last digit of the budgetary estimates.
"The government should immediately cut Indirect Taxes across the board to revive the sinking economy", he said.
[Mohammad Omair is a student of journalism. He is currently on internship.]