CHENNAI: The budget should put money in the hands of people in order to stimulate demand. But the Union budget 2020-21 has only given tax cut to corporate companies, which will not boost the demand, said Former Union Finance Minister P Chidambaram here on Monday. “Only mass consumption will stimulate demand, not that of elite. The government’s decision to cut off Rs 1.45 lakh crore Corporate tax would only benefit some 150 to 200 companies, which will not help to revive the economy and the demand will be further constrained,” said Chidambaram while delivering the lecture on ‘Budget’ organised by Southern India Chamber of Commerce and Industry, Chennai.
Noting that investors are not willing to spend money on new investments, Chidambaram said that capacity utilisation in India is 49%. “When more than 50% of capacity remains under-utilised, what is the necessity for new investment? What steps has the government taken to increase the capacity utilisation?” he asked. He blamed the GST and demonetisation as major reasons for under-utilisation of the capacity.
Alleging that Finance minister failed to read the economic survey before the budget, Chidambaram said there was complete mismatch in the data given in the budget and economic survey. To a query on the recent ban on export of masks to other countries in view of the coronavirus outbreak, Chidambaram said the ban must have been temporary, given that a high number of masks are needed for our own country.