Indian economy a cause for extreme concern, reset of policies needed: Chidambaram

Flagging issues of rising inflation, a growing job crisis, and a decline in social services expenditure, senior Congress leader P Chidambaram on Saturday said the state of the Indian economy is a “cause of extreme concern” and called for a “reset” of the the country’s economic policies.

“A slower rate of growth has been the hallmark of the present government in the last eight years,” the former finance minister said during a press conference in Udaipur, where the Congress is holding a three-day Chintan Shivir.

“Inflation has risen to unacceptable levels, and threatens to rise further,” Chidambaram said, adding that central government economic policies are making matters worse.

Chidambaram also highlighted the unemployment crisis in the country. “The job situation has never been worse. The Labor Force Participation Rate (LFPR) is at a historic low of 40.38 per cent and the unemployment rate stands at 7.83 per cent, ”he said.

Pointing out that the Rupee recently hit an all-time low exchange rate of 77.6 against the US dollar, he said the government appears “clueless” on ways to deal with these developments.

“A Congress-led government ushered in a new era of liberalization 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, ”he went on to say. “After 30 years, it is felt that taking into account global and domestic developments, it may be necessary to contemplate a re-set of economic policies.”

A reset of economic policies would need to address the issue of rising inequalities and poverty, he explained. “We believe that important changes in economic policies will be required in the light of climate change and the need for mitigation and adaptation.”

On Friday, Congress president Sonia Gandhi called for urgent and drastic changes in the organization and said it was time for the party to “self-reflect” as the situation the party is confronted with is “unprecedented”. Extraordinary situations, she said, call for extraordinary measures.

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