India is facing triple whammy of CAD, fiscal and trade deficit: Adhir Ranjan Chowdhury

Congress leader Adhir Ranjan Chowdhury on Monday said that though India is the fastest growing economy, it is facing the triple whammy of high current account deficit, fiscal deficit and trade deficit.

Participating in the debate on the first Supplementary Demands for Grants 2022-23 in the Lok Sabha, Chowdhury said India seems to be on the cusp of stagflation.

Stagflation is defined as a situation with persistently high inflation combined with high unemployment and stagnant demand in a country's economy.

Expressing apprehension, he said, the fiscal deficit is likely to overshoot its target of 6.4 per cent of the GDP despite the increase in tax mobilisation in the current fiscal.

"You are yourself in a triple whammy. On the one hand current account deficit, on the other hand fiscal deficit and trade deficit. I don't know how you will reconcile the fiscal deficit with the growth of the economy as has been committed by this government," he said.

He also advocated the extension of free ration to the poor to ease the pain from high inflation. The purchasing power of people has not improved despite measures taken by the government. So in view of the declining purchasing power of people, this programme could be extended beyond December.

In September, the government decided to extend the Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY) for about 80 crore beneficiaries, at an additional cost of Rs 44,762 crore.

The scheme to provide 5 kg of wheat and rice free of cost to 80 crore beneficiaries every month till December 31, 2022.

The PMGKAY was started in April 2020 to help those affected by a nationwide lockdown due to Covid-19. The scheme has been extended multiple times.

Drawing a contrast, he said, India is the fifth largest economy in the world and also has the highest number of poor.

During the debate, K Ram Mohan Naidu (TDP) said the government should not privatise the profit-making Rashtriya Ispat Nigam Limited (RINL) at Visakhapatnam.

There is no reason to privatise and the government should re-think this, Naidu said.

Last year that the Cabinet Committee on Economic Affairs (CCEA) gave in-principle approval for 100 per cent strategic disinvestment of the government of India shareholding in the RINL along with management control by way of privatisation.