State of economy a cause of extreme concern: Congress

Udaipur, May 14: The Congress on Saturday said that state of the Indian economy is a cause of extreme concern as the foreign exchange has depleted by $36 billion, calling for a re-set of the economic policies.

Stating that in the ongoing 'Chintan Shivir' the state of the economy featured prominently in the deliberations, the convenor of the committee on economy P. Chidbambaram told a press conference: "There are 60 members in our group. Yesterday, 37 members expressed their views over four hours. The discussions will continue today and tomorrow."

The party has concluded that the state of the Indian economy is a cause of extreme concern. A slower rate of growth has been the hallmark of the present government in the last eight years. The post-pandemic recovery has been indifferent and halting. The growth estimates of 2022-23 have been lowered from time to time in the last five months."

It said that the inflation has risen to unacceptable levels, and threatens to rise further. WPI inflation is at 14.55 per cent and CPI inflation is at 7.79 per cent. "The government is actually fueling the rise of inflation by its wrong policies, especially through high taxes on petrol and diesel, high administered prices and high GST tax rates," Chidambaram said.

The party, in its deliberations, said that the job situation has never worse. The Labour Force Participation Rate (LFPR) is at a historic low of 40.38 per cent and the unemployment rate stands at 7.83 per cent.

"We reiterate our charge that social services expenditure as a proportion of total expenditure has fallen to an average of 5 per cent (in 8 years) from an average of 9 per cent in the 10 years between 2004 and 2014," he added.

Chidambaram asserted that the external situation has added to the pressures on the economy and the government appears clueless on the ways to deal with these development as: "$22 billion has flowed out of the country in the last seven months. The foreign exchange reserves have depleted by $36 billion. The exchange rate stands at Rs 77.48 to a dollar, the highest ever."

He said that the Congress-led government ushered in a new era of liberalisation in 1991. The country has reaped enormous benefits in terms of wealth creation, new businesses and new entrepreneurs, a huge middle class, millions of jobs, exports and lifting 27 crore people out of poverty during a 10-year period. After 30 years, it is felt that taking into account global and domestic developments, it may be necessary to contemplate a re-set of the economic policies.

The party said that re-set of economic policies must also address the questions of rising inequalities, extreme poverty among the bottom 10 per cent of the population, India's rank in the Global Hunger Index 2021 (101 out of 116 countries) and evidence of widespread nutritional deficiency among women and children and a comprehensive review would also be justified by the health and education outcomes as revealed by the Annual State of Education Report 2021 (ASER 2021) and the National Family Health Survey-5 (NFHS-5).

Over 400 Congressmen and women have assembled in Udaipur to reflect on the state of the country, the political situation, the state of the economy, the role of political parties, the organisational strengths and weaknesses of the Congress party among other issues.