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Agencies

Senior Congress leader and former Union Finance Minister P Chidambaram on Saturday said that Finance Minister Nirmala Sitharam should resign.

Reacting on Nirmala Sitharaman's claim that Congress was mistaken in saying the NDA government had lost control over the economic situation, former finance minister termed her statement 'a string of irrelevance'. "Today food inflation touched 10 per cent, factory output shrunk [to] 3.8 per cent, retail inflation has crossed five per cent."

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

Chidambaram also rejected the claim that the economic slowdown was cyclical. "Only two people believe that it [slowdown] was cyclical - one is the finance minister and second, chief economic adviser." The Congress leader said that economic experts agree that the slowdown is structural and needs to be addressed as soon as possible.

Chidambaram said that to fix the two key issues plaguing the economy - demand crisis and credit squeeze - the government first must accept that they have made serious mistakes. "Demonetisation was a serious mistake. The design of the GST was a mistake and the implementation was completely wrong. 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."

"After admitting they they made mistake, they must layout the prescription."

On being asked what would you do if you were Nirmala Sitharaman, he said "I would resign. If my assessment was so wrong, I would resign"

"I am not asking for her resignation, it is for PM Narendra Modi to ask for."

In his prescription for the ailing economy, Chidambaram said that the first thing that needs to be addressed is the demand side. "The supply side will take care of itself, address the demand side."

"Put money in people's pockets, cut regressive taxes and don't cut progressive taxes."