'Demonetization a serious mistake, GST design completely wrong, FM should resign': P. Chidambaram

Former Union Finance Minister P Chidambaram said on Saturday that the current FM Nirmala Sitharaman should resign following the several economic problems India is facing.

Sitharam had called Congress’ claim that the NDA government had lost control over the economic condition in India a mistake after which Chidambaram called her statement irrelevant, reported the Hindustan Times.

Chidambaram said, "Today food inflation touched 10 per cent, factory output shrunk [to] 3.8 per cent, retail inflation has crossed five per cent."

Chidambaram also said that the year 2019 is likely to end with less than 5% GDP growth, which 'as per old methodology would be around 3-3.5 per cent growth rate'.

Chidambaram had nothing to hold back, he bashed the FM and the chief economic adviser for saying the economic slowdown was cyclical, he said, "Only two people believe that it [slowdown] was cyclical - one is the finance minister and second, chief economic adviser." Chidambaram said that the economic slowdown is structural in nature and should be addressed soon.

He urged the current government to accept their mistakes in implementing the GST and called demonetization a big mistake. According to Chidambaram, accepting their mistakes is the first step towards fixing key issues such as demand crisis and credit squeeze affecting the economy.

Chidambaram termed Demonetization a “serious mistake” and the design used to implement the GST as “completely wrong”. According to Hindustan Times, he said, “They gave extraordinary powers to tax and investigating agencies and they have put fear in the minds of the investors by indulging in the retrospective taxation of humongous sums of money."

Chidambaram suggested the second step to fixing the economy is laying out a prescription.

When asked his response if put in Sitharaman’s shoes, Chidambaram told Hindustan Times, "I would resign. If my assessment was so wrong, I would resign," and said that it wasn’t him asking for her resignation, Prime Minister Modi should do it.

According to the former Union Finance Minister, the government needs to first take steps to revive the demand cycle and the supply side will straighten up on its own. He said, "The supply side will take care of itself, address the demand side."

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