Communist Party of India (Marxist) veteran Asim Dasgupta, who served as West Bengal’s Finance Minister for nearly a quarter of a century, the longest one has held the portfolio in a democratic setup anywhere in the world, has said that the Centre can revitalise the economy post-lockdown by merely shifting allocations in the Union Budget.

Speaking to The Hindu, he listed five steps he felt the Centre should take without wasting any time in order to rescue the economy which has suffered a body blow due the ongoing lockdown that began on March 24 and is expected to last till May 3.

Also read | IMF projects 1.9% growth for India in 2020

“Step 1 should be to augment the allocation for food subsidy so that subsidised food through universal PDS can be provided for the next six months. The current allocation in the Union Budget is ₹1.15 lakh crore, this should be augmented by at least ₹ 55,000 crore,” Dr. Dasgupta, who holds a Ph.D degree from the Massachusetts Institute of Technology and served as the State’s Finance Minister from 1987 to 2011, said.

Urban employment programme

“Step 2 should be to increase the number of working days under MNREGA from 100 to 150 in a year. This would require ₹30,000 crore, in addition to the ₹60,000 crore already allocated in the Union Budget. Step 3 should be to start an urban employment programme on the lines of MNREGA, which would require ₹15,000 crore,” he said.

“Step 4 should be to generate more employment by pumping in money in the labour-intensive cottage and small-scale sector. This would need an additional ₹20,000 crore. Step 5 should be to boost the health sector by hiking the allocation by 40%, which would mean additional ₹25,000 crore,” Dr. Dasgupta said.

‘Scrap corporate tax relief’

“Now you will ask me, where will all this money come from? These additional sums, if you calculate, add up to ₹1.45 lakh crore. That amount has already been earmarked in the Budget as corporate tax relief. This relief has to be scrapped — it has not even been initiated properly yet. So, the extra funds needed are already available within the Budget,” he said.

If an additional sum of, say, ₹1.45 lakh crore is required, the Centre, he said, could go for deficit financing. “The deficit is already to the tune of ₹6 lakh crore, if you add ₹1.45 lakh crore to that it won’t make much of a difference. Inflation happens when there is more demand and less supply. Right now our biggest challenge is to create demand,” he said.

Dr. Dasgupta said that while the lockdown was necessary, a preparatory period of at least one week should have been given for migrant workers to return home, and that the lockdown should be withdrawn in a phased manner.