Date: Tuesday, September 1, 2020
The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:
Indian Economy in Severe Recession: Hike Public Expenditures to Revive Domestic Demand
The data released by the government yesterday shows the total devastation of the Indian economy that began much before the Covid-19 pandemic emerged. A 24 per cent fall in the GDP growth rate is phenomenal and unprecedented. The cumulative impact of demonetization, GST implementation and the abrupt unplanned, unprepared national lockdown have all contributed to the destruction of the Indian economy.
The primary cause for this is the massive fall in domestic demand, i.e., sharply declining purchasing power in the hands of our people. Instead of addressing this issue by vastly enhancing public investments to build our much-needed infrastructure and general large-scale employment, which would have strengthened the demand in the economy, the Modi government is focused on pursuing the neo-liberal trajectory of making more funds available for investment by private corporates, giving them greater tax concessions and looting national assets.
No amount of incentives for private investment can revive the economy. What is produced by such investments needs to be sold in the markets. There are no buyers, both globally and domestically.
The CPI(M) has all along mounted public pressure on this Central government to increase governmental expenditures. The government, however, continues to pursue policies of constraining expenditures which, in turn, also drastically reduced governmental revenues because of the economic recession.
The Polit Bureau of the CPI(M) reiterates that massive hikes in public investments coupled with cash transfers and free food is the only manner in which any meaningful economic recovery is possible along with providing people some relief and livelihood.