New Delhi, May 6 (IANS): Congress leader P. Chidambaram has cautioned the government on raising taxes as he said that when business is halted then this should not be done and instead the government should borrow to meet the deficit.

Former Finance Minister Chidambaram said "New or higher taxes are justified only when the economy is booming. Tax burdens on the middle class and poor is actually taxing distress."

The Congress leader said that government should give money into the hands of the people.

"Governments should give money to the people in times of distress, not squeeze and take money from the people," tweeted Chidambaram.

The Congress has been demanding cash transfers from the government to poor families.

"Instead governments are doing a Reverse Transfer of money from the people to the government! Cruel. New or higher taxes will impoverish families further," he said.

He suggested that governments must borrow to meet their deficits, not impose higher tax burdens when economic activity has ground to a halt.

The party has suggested that "One way of doing it is the direct transfer scheme something called NYAY which the UPA had proposed in its manifesto. Unless you create liquidity in the hands of the people it is not possible to fix the demand side."

While in an interaction with Rahul Gandhi noted economist and Nobel laureate Abhijit Banerjee suggested a need for a stimulus package.