Speaking here on the Union Budget 2020-21 presented by Finance Minister Nirmala Sitharaman on Saturday, he contended that only mass consumption would stabilise demand, and the Finance Minister should have ensured putting money in the hands of large number of people.
He said given the finance constraints, the government should have redrawn its expenditure pattern so that long gestation projects were deferred and bulk of the money should have been allocated to programmes like Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) or PM Kisan Yojana as the money would have gone to people's hands in three months time to spur demand.
According to him, the economy is in distress and needs a radical approach and a radical surgery.
"Unfortunately the managers in the government are unwilling to accept that the economy is demand constrained, investment starved even as six quarters have showed declined growth.
"Both imports and exports have declined, and all most of the economic indicators are in negative," he added.
Chidambaram also said the government finances are under pressure.
He hoped the government would wake up and act now as the year 2016-17 was a year of demonetisation and 2017-18 was year of flawed Goods and Services Tax while the year 2019-20 was a wasted one.
Chidambaram said he hopes after the debate in the Parliament, the government makes some changes and take some of meaningful advice given by the opposition.
He added that the country can go back to at least six per cent growth if the government does few things that are recommended and from there to seven per cent.
( With inputs from IANS )