New Delhi: The Modi led government has messed up the macro-economic system over the last five years and currently to revive demand, it should have abolished the income tax rather than cutting corporate tax which will yield no result for economic revival, senior BJP leader and current Rajya Sabha member Subramanian Swamy said.
Critical of the series of recent government measures to pull the economy out of the slowdown, Swamy also termed the previous five years of BJP rule as bad for the macro-economy.
“The government, in the last five years, has been doing things which are bad for macro-economics. The Prime Minister has done good works in micro-economics in Ujjawala, providing LPG connections to women in rural areas… But macro-economics is the whole system… and the whole system has been put into a mess which requires rectification and that can not be rectified by individual measures like reducing taxes for the corporate sector,” Swamy told to media “
Abolishing income tax had been a very salutary (step), the middle class would have been very happy and they would have saved the money. The problem with corporate sector is that demand is low, so demand can only come when you empower the people, the people means income tax and that should have been abolished. Reducing corporate tax is of no use. Because they can only increase more supply but if there are no buyers, then there is no result in increasing supply,” he said.
Earlier, while speaking about his book, Swamy said: “We need a new reset for our economy. We did not perform at macro growth level. The savings were inefficiently used. The country needs 10 per cent growth for 10 years if we have to eliminate unemployment.”
Asked why after so many steps, the situation has not improved as demand has not picked up, he said: “Because Finance Ministers in our BJP government don’t know any economics. That’s the problem.” Responding to a query if at the moment, the government is indulging in fiscal profligacy to come out of the current slowdown, he said: “They don’t even know what that means… the question in what they are doing is ad hoc. I have been writing since 2016 that this collapse will come. That time, people thought I was being critical, but now they know.”
Swamy said the country is heading towards a lower growth than 5 per cent but it can be turned around.