‘Government is prisoner of its own fears,’ says Congress leader Chidambaram on economic package
However, Narendra Modi said that Finance Minister Nirmala Sitharaman’s announcements will address problems faced by businesses, especially MSMEs.
The Congress on Wednesday criticised the Rs 20 lakh crore special economic package announced by Prime Minister Narendra Modi. Finance Minister Nirmala Sitharaman had earlier in the day detailed the first tranche of the package, which is being rolled out in an effort to revive the economy during a lockdown to combat the Covid-19 pandemic.
“Except for modest MSME [micro, small and medium enterprises] package, we are disappointed with announcements,” Congress leader and former Finance Minister P Chidambaram told reporters, according to PTI. “The Centre has announced Rs 3.6 lakh crore in the Rs 20 lakh crore package. Where is the rest of the Rs 16.4 lakh crore?”
However, Sitharaman had said during her press conference that all the details of the package will be unveiled over a number of days.
Chidambaram said the government must spend more, borrow more, and allow states to borrow more. However, it is doing none of these things, he alleged. “This government is a prisoner of its own ignorance and fears,” the Congress leader claimed.
He also attacked the government for the lack of provisions for migrant labourers. “There is nothing in what the finance minister said, for lakhs of poor, hungry migrant workers who have been walking to their homes,” he alleged. “This is a cruel blow to those who toil every day.”
Later in the evening, the government announced that Rs 1,000 crore from the PM-CARES fund would be set aside to help migrant labourers.
The prime minister, who had announced the Rs 20 lakh crore package on Tuesday, had said it would cater to the problems of the small businesses, labourers, farmers, the middle class and cottage industries.
West Bengal Chief Minister Mamata Banerjee called the package a “big zero”, according to Trinamool Congress leader Derek O’Brien. “People were hopeful to get some relief...but it’s a big zero!” Banerjee said. “Nothing for states. Nothing to fight Covid-19. Killing federalism. How will states run?”
Communist Party of India (Marxist) General Secretary Sitaram Yechury called it the “pettiest form of politics”. “We are witnessing the pettiest form of politics from Modi govt,” he tweeted. “There is nothing for the state govts which have been asking for funds, as they are at the forefront of fighting the pandemic. Nothing for them, not even their legitimate dues!”
Several chief ministers had in a virtual meeting with Prime Minister Narendra Modi on Monday said that the Centre should pay them their Goods and Services Tax earnings.
“People’s own money, being packaged back to them as refunds and a boost!” Yechury added. “People’s own savings and income tax refunds being given back to them – how can this be a ‘stimulus’?”
The Nationalist Congress Party said Sitharaman should increase the share of MSME under the public procurement policy from the current 25% to 50%, PTI reported. “This will greatly help MSMEs to expand their capabilities and take benefit of the corpus fund announced by the finance minister,” Nationalist Congress Party Spokesperson Mahesh Tapase said.
Sitharaman announced Rs 3 lakh crore collateral free automatic loan for businesses, including for MSMEs. These loans have to be returned within four years. For the first year, the principal will not have to be repaid.
She also changed the definition of MSMEs to their advantage. The finance minister said investment can be up to Rs 1 crore and turnover Rs 5 crore for a micro enterprise.
Prime minister, BJP praise announcements
Narendra Modi, however, said that Wednesday’s announcements will address problems faced by businesses, especially MSMEs. “The steps announced will boost liquidity, empower the entrepreneurs and strengthen their competitive spirit,” he tweeted.
The Bharatiya Janata Party praised Sitharaman’s announcements and thanked Modi. BJP National President JP Nadda said the announcements show that the central government is compassionate and committed towards creating jobs and stimulating the economy.
“In the wake of COVID-19, today’s announcements for MSMEs like provision of collateral free loans, debts and equity, liquidity for NBFCs [Non-Banking Financial Corporations] and support to real estate, Discoms, contractors and other tax measures show the commitment to create jobs and stimulate economy,” Nadda tweeted.
Union Home Minister Amit Shah thanked Modi and Sitharaman. “In these challenging times, to boost Make In India, help our MSMEs and other companies from the, often unfair, competition by foreign giants, Modi government has disallowed global tenders upto Rs 200 crore,” he tweeted. Shah said that the Centre is doing all it can to support the business sector.
The number of coronavirus cases in India rose to 74,281 on Wednesday and the toll reached 2,415, according to data from the Union health ministry.