Foreign direct investment (FDI) is not worth much unless there is technology transfer, senior BJP leader Subramanian Swamy said on Wednesday.
Besides, it has relaxed FDI policy for medical devices and audit firms associated with companies receiving overseas funds.
Swamy also emphasised that India needs to grow at 10 per cent for the next 10 years.
Replying to a question at an event organised by industry body Assocham, he said those who are not aware of the difference between microeconomics and macroeconomics should not be made finance minister as they cannot improve the economy.
"After seeing Mr P Chidambaram and Mr Arun Jaitley, we should have moratorium on having lawyers as the Finance Minister," he said.
Swamy added: "Everybody knows what I think about Arun Jaitley. If you want to improve economy then you must know difference between macroeconomics and microeconomics."
When asked whether he could persuade Jaitley to abolish income tax, Swamy said: "I have to persuade Arun Jaitley to resign and go and not to persuade him to abolish Income Tax which he will never do."
He said former Prime Minister Manmohan Singh did wonders because he understood economics.
However, as a prime minister he failed to pursue economic reforms as he was not allowed to take decisions.
Swamy, who is also an economist, noted that under Prime Minister Jawaharlal Nehru India followed the Soviet economic model which was not suitable for the country.
"To hide the failure of Soviet economic model, which India followed from 1950-1990, some left leaning economists dubbed India's average economic growth of 3.5 per cent as Hindu Rate of Growth, actually it was a Communist Rate of Growth," he asserted.
On the country's current economic growth, Swamy said: "7 per cent economic growth is impressive compared to what we were growing under the British rule or during the period when we were following Soviet economic model, but it is not sufficient to transform us in a global power."
He said India needs to grow at 10 per cent a year for the next decade.
Swamy further said that Income Tax should be abolished right away and once it is done, people would celebrate not because they are fed up of paying taxes but because they are fed up with the inspectors.
"Also the inspectors have become instruments of political oppression," Swamy noted.
He said it is the domestic saving by Indian households which holds the key to reviving investment and not the foreign investment.
"Till about three years ago, the domestic saving was about 35 per cent of the country's GDP and this figure has dropped down to 29 per cent, as interest rates on fixed deposits have come down," he said.
Swamy said the banks must also bring down the prime lending rate (PLR) to 9 per cent, adding that high lending rates have particularly hit the small and medium enterprises, which are the biggest source of employment, the need of the hour.
He also came down heavy on the Goods and Services Tax (GST), describing it as a 'disaster'.
The senior BJP leader also noted that low priority to agriculture and very low investment in the sector were also responsible for holding up the economic growth.
He said that it was because of his efforts that the GSTN, which runs the IT backbone for GST, would now come under the ambit of government auditor CAG.