Union Budget 2022-23 : Just ahead of the Union Budget 2022-2023, when the economy is reeling under the third wave of the COVID-19 infections, Subramanian Swamy, economist, mathematician and Member of Parliament, in an interview, discussed various aspects of the economy and steps needed to bring it back on the right track.
When asked what he would do if he became the finance minister, Dr Swamy said, “Firstly, I would announce that effective from April 1, till we are back to normal, no income tax will be paid by anybody.
And once normalcy comes, I think we should start making that permanent.” He further added that he would cut interest rates on loans from 12 per cent to 9 per cent.
He said he would also ask Minister of Road Transport and Highways of India Nitin Gadkari to build as many roads as possible.
The MP said that he first suggested abolishing income tax in the beginning of the tenure of the BJP government. He said that income tax collections were around Rs 4 lakh crore then.
“At that time, when I said it, I said there are alternative ways of raising resources without taxation, like auctioning 2G licenses, how much did you get from the first auction? Rs 4 lakh crore – exactly what the income tax was.”
Dr Swamy explained that there are other options such as raising resources from coal auctions. If the economy booms, people are willing to give taxes, he added.
He also suggested company incomes that are reinvested must be exempt from tax.
Talking about sustainable growth and job creation, Dr Swamy said that the best way is to handle demand factors in such a manner that supplies fly out of the shelf.
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He said that unlike what ex-RBI governor Raghuram Rajan had stated, raising interest rates would put a lot of MSMEs out of business, leading to increase in unemployment.
“I must add that unemployment today is more than what it was 10 years ago,” he said.
Referring to the state of the economy, the MP said that India failed to combat the ill effects of the pandemic on the economy.
It also accentuated the decline that had started in 2016. “And in the third quarter of 2022, we had come down to 3.1 per cent growth rate in GDP on an annual basis, which means this is worse than Jawaharlal Nehru,” he said.
Dr Swamy said that India began with excess supply, and subsequently failed to boost demand. He said ideally the government should have abolished income tax and gone in for large public works.
“I think things were not done and I must say the finance ministry has been a hopeless failure,” he said.
The MP also said that plans like asset monetisation, national infrastructure pipeline and Gati Shakti won’t make much of a difference because the economic climate is not conducive.
Giving an example, he said that after the Prime Minister put all his strength behind the privatization of Air India from 2017, it got done only at the end of 2021, that too in a haphazard manner.
Dr Swamy said that in order to achieve the $5 trillion economy dream, India needs to grow at 14.8 percent per year. He said India has the potential to reach that growth rate.
“And I’m telling you, we can also demonstrate in future and overtake China in another 10 years,” he said.
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