Forget small savings: Economists

NEW DELHI : Finance minister P Chidambaram’s meeting with prominent economists on Saturday turned out to be an interesting discussion on the CMP of the UPA government and the focus was on growth.

Economists even advised the FM not to bother too much about the return on small savings as the current situation deserves an all-out push for stimulating the economy.

On the corporate sector’s reluctance to bear the ‘education cess’ proposed in the CMP, varying views emerged. “While there was no consensus, some of participants emphasised that education was an important area,” said Pradeep Mehta of Consumer Unity and Trust Society.

“It is for the government to take a final decision but we presented different options to the finance minister,” said B B Bhattacharya of Institute of Economic Growth.

Unfortunately, only 11 of 21 people invited turned up.

While supporting the CMP’s emphasis on targeting strong economic growth, the economists also endorsed the plan to step up investment in agriculture and infrastructure.

The other key suggestions included persisting with disinvestment, rationalisation of taxes, introduction of VAT and widening the service tax net.

“If the government wants employment generation, the Budget should pave the way for strong growth,” Bhattacharya said, adding only strong growth can lead poorer sections to prosperity.

To uplift farmers, there is a need to encourage them to diversify from traditional foodgrains into high-value products in horticulture and floriculture. The government should encourage the corporate sector to invest in agriculture and strengthen infrastructure, he added.

Chidambaram declined to comment on any of the suggestions.