Tough year ahead for country as oil prices will remain high, rupee will weaken: P Chidambaram

Amid growing economic uncertainties all over the world and complete collapse of Sri Lanka’s economy, former Finance Minister P Chidambaram has predicted that India has a tough year ahead.

Speaking at the National Economy Conclave at Jawahar Bhawan organized by Rajiv Gandhi Institute for Contemporary Studies, Chidambaram attacked the BJP government, saying, “India has a tough year ahead. Oil prices will remain high. Supply chains will remain choked. Foreign portfolio investment will continue to flow out of India. As inflation rises, the rupee will weaken”.

He attacked the Modi government for indulging in “optics” rather than working seriously to ease economic woes.

The senior Congress leader said, “For the BJP government, it is good optics to project a 9%-9.5% growth. They make unrealistic policy announcements, then realise that they don’t have money for it at the end of the year and therefore cut back on critical expenditure.”

“There are serious problems in the management of India’s economy and India’s polity…that’s why the growth will be only moderate growth of about 4% in 2022. If that happens, there will be greater unemployment and distress,” added Chidambaram.

Tamil Nadu Finance Minister, P Thiagarajan, one of the key speakers at the Conclave, attacked PM Narendra Modi for weakening the federal structure of the Indian Republic.

“The Prime Minister, who was the greatest champion of federalism when he was Chief Minister, has become the most antithetical to federal principles,” said Thiagarajan.

Asserting that bad economic policies will have a bad consequence not only for the economy but for democracy, Thiagarajan said, “When state legislatures pass bills, the governors and President withhold assent even though their role is mostly ceremonial. Is this democracy?”

Speaking at the event, Kerala Finance Minister, KN Balagopal said, “From demonetisation to monetisation (National Monetisation Pipeline), none of the Union government’s current policies are pro-people”.

He also said, “Even though every state government is asking for an extension on GST compensation, the Union government is refusing to do so, ignoring the devastating pandemic”.

“The Union government's hostile federalism will not enhance national unity…they need to understand that India’s fiscal federalism and economic health transcend party differences,” said Balagopal.