New Delhi: BJP leader Subramanian Swamy has said: “The Indian economy is heading for a ‘major depression’ and it can ‘crash’ soon if efforts are not put to revive it.”
As per a report by Financial Express, the Rajya Sabha MP claimed that last May, he had written a 16-page letter to Prime Minister Narendra Modi warning him about the economy which is in a “tailspin”.
“Today, the economy is in a tailspin. Yes, it can crash. We need to do a lot of good things to revive the economy. Even a tailspin can be made to steady. If nothing is done, we are heading for a major depression. There will be mass scale… banks might collapse, factories might start closing,” he said in an interview to CNN-News18 recently.
The former prime minister Manmohan Singh also hit out at the government once again on the GDP growth, saying hasty implementation of the GST and the withdrawal of 86 percent of currency during the demonetisation exercise will further affect the GDP numbers.
The GDP for the first quarter (April-June) of the financial year 2017-18 slumped to a three-year low at 5.7 per cent, far lower than 7.9 per cent recorded in the same quarter last year.
Subramanian Swamy also claimed that India’s growth rate is much lower than what is being presented. He said, “It is lower than what is being told to you, and it is going to decline, according to what I call Samuelson-Swamy theory of index numbers, which tells you how to calculate the correct index numbers.”
Subramanian Swamy suggested that to support the revival of the economy, it is important to enthuse the public with immediate change, which would be possible by abolishing the income tax. “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,” he said.
According to him, it would give a huge boost to the savings rate; and that would mean the investment cycle would start.
“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,” Swamy added.