Chidambaram slams Centre on Rupee, employment, LPG

New Delhi: Senior Congress leader and former Union finance minister of India, P Chidambaram slammed the Modi government on various issues, including falling rupee, employment generation and LPG price rise, PTI reported.

He told PTI that Rupee's decline is inevitable because of India's current account deficit, inflation etc.

He said, "The fall in the dollar-rupee rate is inevitable given our current account deficit, inflation, increase in interest rates domestically and in the US, the outflow of foreign portfolio investments and decline in exports.

"The exchange rate must be viewed as a 'price'. It is one of the 'trinity' that the RBI has to manage. The rupee will gain only when the fundamentals improve," he added.

The rupee, which on Thursday closed at an all-time low of ₹ 79.99 to a US dollar, recovered 8 paise to settle at 79.91 on Friday.

A report by Bank of America stated that India's current account deficit, or the shortfall between the money received by selling products to other countries and the amount spent to buy goods and services from other nations, is projected to touch USD 105 billion this fiscal, or 3 per cent of the GDP. This is primarily due to India's steadily growing trade deficit, the report said.

In June, the trade deficit had inflated to reach a record USD 26.18 billion after a sharp increase in oil and gold imports. Government data suggested that imports increased by 57.55 per cent to USD 66.31 billion in the month compared to 2021, and exports rose by 23.52 per cent to USD 40.13 billion.

However, retail inflation made a marginal drop to 7.01 per cent in June, but it is still above the Reserve Bank of India's comfort level. The consumer price index (CPI) based inflation stays at 7.04 per cent.

Chidambaram later criticised Prime Minister Modi's "one million job drive", saying that it would not alleviate the unemployment situation in the country. He said, "The Union government has admitted that there are over 8,00,000 vacancies in the central government alone. If you net off the vacancies against the proposed recruitment of 10,00,000 people, what is left is less than 2,00,000. And, that is over a period of 18 months."

According to the Centre's submission at Rajya Sabha earlier this year, there were over 8.72 lakh vacant posts in central government departments as of March 1, 2020.

Chidambaram said that the large number of people applying for the Centre's new 'Agnipath' scheme, despite it being temporary in nature with no post-job benefits, was an indication of "how bad" the employment scenario is.

"Just recently, against 3,000 'Agniveer' posts in the Indian Air Force (temporary with no tenure or pension and medical benefits), there were 7,50,000 applicants. That is an indication of how bad the employment situation is and how desperate the youth are," he said.

Chidambaram also mentioned the rise in LPG prices, saying that the Centre is not bothered to help the common man in a time of crisis.

"This government is callous. When people are suffering, it is the duty of the government to help and mitigate their burden. The Centre is more concerned about the balance sheets of the oil and gas marketing companies. They are, anyway, making windfall profit. Instead of passing on some of it to people (in the form of price cuts), the government is taxing the windfall gains and enriching itself," Chidambaram alleged.

Cooking gas LPG price was on July 6 hiked by ₹ 50 per cylinder, the third increase in rates since May on firming international energy prices.

Non-subsidised LPG now costs ₹ 1,053 per 14.2-kg cylinder in the national capital, up from ₹ 1,003 previously, according to a price notification of state-owned fuel retailers.