Subramanian Swamy, the outspoken senior BJP leader and the self-proclaimed corruption crusader, also claims to know how to revive the rather slumping Indian economy. This morning, the BJP leader tweeted: If present economic policies modified by six clear new steps then by March 2018 we can be on a 9% growth rate.
Subramanian Swamy has, time and again, said that the Indian economy is in a tailspin and if efforts are not put in, it will crash. Now, amid the news reports that the government is mulling the easy way out by rolling out a fiscal stimulus package worth Rs 40,000-50,000 crore, even at the cost of letting the fiscal deficit widen, Subramanian Swamy says that “six clear new steps” can actually push India’s growth rate from meager 5.7% to 9% in just nine months.
The Harvard-educated economist, over a period of time; and in a recent television interview, highlighted his ideas for the economic revival. He also said that he had written a 16-page letter to Prime Minister Narendra Modi last May, warning him about the economic slowdown and suggesting the ways to revive it.
Be clear in your mind: PTs. If present economic policies modified by six clear new steps then by March 2018 we can be on a 9% growth rate
— Subramanian Swamy (@Swamy39) September 22, 2017
Subramanian Swamy has been a restless advocate of the personal income-tax abolition, saying that it will have immediate change which public would take notice of. “Whatever you do, the public must see immediate change. I think the first thing we should do is abolish the income tax. It’s such an easy thing to do, but they haven’t done it,” Subramanian Swamy said in a recent interview.
Subramanian Swamy argues that if income tax is abolished it will give a huge boost to the savings rate and subsequently revive the investment cycle. He adds that revenue mobilisation through income tax has become redundant and it needs to be “scrapped” and suggests spectrum auction and coal block auction to be an alternative for revenue.
Bringing back black money is another point high on his list. The leader also claims that Rs 120 trillion, or 60 times the revenues from tax collection, are stashed in tax havens abroad which need to be brought back invoking the UN Resolution of 2005, which was ratified by India in 2011. The United Nations Convention against Corruption (UNCAC) is a legally binding anti-corruption agreement which strengthens international law enforcement and judicial cooperation between countries by providing effective legal mechanisms for international asset recovery.
Subramanian Swamy, who had earlier asked the government to sack former RBI governor Raghuram Rajan over higher interest rates, says the way to start employment cycle is by lowering the interest rates. “You must bring down the interest rates to 9%, and raise the fixed deposit interest rate also to 9% to encourage savings. The rate of interest is an instrument that affects the small and medium industries,” he Subramanian Swamy said.
“The big industries can borrow money abroad also. In the United States, you can borrow for 2%. While here, it being at 12%-18% is very cruel, and much of the damage from it has been to the small and medium industry, which produces bulk of the employment. The employment cycle must start, which can happen only if you get these small and medium industries moving, for which the cost of capital must come down,” he added.
The leader has been candid in criticising in his own government for the demonetisation exercise, which he says was perfect in principle but failed in execution. He said that for the demonetisation to succeed, there was a need for six-times more Rs 100 notes. He has, in the past, also advocated for printing more rupee notes to fully finance infrastructure projects.
Subramanian Swamy also says that the exchange rate of rupee against dollar must be lowered. He also feels that the reason for sliding private investment is low confidence and the government must take necessary measures to boost investors’ interest.