Former Union Finance Minister P Chidambaram on Sunday suggested the government to borrow more to help stimulate demand and revive the country’s economy. The senior Congress leader also suggested some ways to raise funds, including easing of FRBM norms, accelerating disinvestment and borrowing money from global banks.
As part of measures to revive the economy, he demanded transferring cash to 50 per cent of poor families, providing them food grains and increasing spending on infrastructure, besides paying the Goods and Services Tax (GST) compensation of the states. He tweeted, “Some concrete steps can be taken to encourage demand and consumption and revive the economy, transfer some cash to the poorest 50 percent of the families.” Give food to all the families who need it. Increase expenditure on infrastructure projects. Use food grains as a commodity for payment of wages. Start large public works. Recapitalize banks so that they can lend more and pay the GST compensation of the states.
Chidambaram said, “All these will require money. Take a loan do not hesitate. He suggested, “Some concrete steps to raise funds can be of this type. Simplify the provisions of FRBM and raise more debt this year. Speed up disinvestment. Use the $ 6.5 billion offer from the International Monetary Fund, World Bank, Asian Development Bank, etc. Monetize the fiscal deficit as a last resort (take money late in bonds directly to the Reserve Bank).