2 min read.Updated: 10 Sep 2021, 04:41 PM ISTLivemint
In a letter to finance minister Nirmala Sitharaman, Mitra said the government should switch to demand stimulation and provide money in the hands of the people
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NEW DELHI :
The supply-side measures taken by the Centre to revive the covid-hit economy have failed, West Bengal finance minister Amit Mitra has said in a letter to finance minister Nirmala Sitharaman, adding the government should switch to demand stimulation and provide money in the hands of the people.
In the letter, dispatched on Thursday, Mitra said the country's citizens are in distress which is likely to deepen over the coming year. “Yet paradoxically, your government’s propagandists are gloating over the 1st quarter growth of 2021-22, which economists have found utterly misleading and other experts have called it a mirage. The common people are being hit from multiple directions. This is a tragic outcome arising from your government’s utterly wrong macroeconomic policies," he added.
Quoting a host of surveys by the government and private organizations, Mitra said, in August, the unemployment rate had shot up again to 8.32% which implies that 36 million people have lost jobs. “In other words, 36 million people in India have no jobs and have no earnings. This is one and half a times the entire population of Australia. In fact, Azim Premji University study reveals ‘nearly half of the formal salaried workers have moved into informal work between late 2019 and late 2020—shocking indeed," he added.
Mitra said Sitharaman may not be aware that an unprecedented reverse migration of workers is taking place in India from factories to farms. “This is a sign of distress where non-agricultural sectors are simply unable to provide employment," he added.
The West Bengal finance minister said persistent inflation cutting into the meagre consumption expenditure of the poor has reduced their real income. “Needless to say that the cruel rise in petrol and diesel prices and now two consecutive increases in quick succession of cooking gas cylinders by ₹25 on 17 August and again by ₹25 on 1 September, has pushed the price of cooking gas cylinder to ₹911. You can well imagine the plight of the common people in general and our homemakers in particular," he wrote.
Citing the GDP data, Mitra said private consumption has collapsed in first quarter of FY22 dipping 12% below the pre-pandemic levels of FY20. “It is pathetic that private consumption in FY22 so far, is almost identical to private consumption in FY18—four years ago (according to CMIE). In fact, the RBI’s Current Situation Index dropped to a record 48.5% in May, 2021 from 53.1% in March, 2021. This demonstrates the deep pessimism among the customers of our nation," he added.
An email query sent to the finance ministry has so far remained unanswered. The story will be updated if and when the ministry responds to Mitra’s claims.