Former Finance Minister P Chidamabaram on Monday expressed disappointment at the Centre’s economic package of Rs 20-lakh crore, claiming that it actually amounted to only Rs 1.86 lakh crore, or 0.91% of the Gross Domestic Product, PTI reported. Finance Minister Nirmala Sitharaman provided the contours of the package in five tranches last week.
Chidambaram claimed that the package, brought in to combat the adverse economic effects of a lockdown imposed to restrict the spread of the coronavirus, has left several sections of the society “high and dry”. This includes migrant families, farmers, small shopkeepers etc, he said. The senior Congress leader said the fiscal stimulus package is “totally inadequate” considering the effect of the coronavirus pandemic on the economy.
Prime Minister Narendra Modi had announced the economic package on May 12 in a television address to the country.
“We express our thorough disappointment and request the government to reconsider the stimulus package and announce a revised and comprehensive fiscal stimulus package of not less than Rs 10 lakh crore of real additional expenditure equivalent to 10% of the GDP,” the Congress leader said. “Most analysts, rating agencies and banks have placed the size of the fiscal stimulus at between 0.8 to 1.5%.”
Chidambaram said Sitharaman had acknowledged that additional expenditure should be financed by additional borrowing, the Hindustan Times reported. “The true value of the fiscal stimulus package will be known when we know what is the additional borrowing in 2020-21 to finance the additional expenditure over and above the expenditure budget of Rs 30,42,230 crore,” he added. “The truth cannot be hidden for long.”
Chidambaram also accused the Centre of deliberately sidelining the Parliament, and being opportunistic by pushing reforms. “I think the government is deliberately sidelining Parliament,” he said. “A meeting of the Parliamentary Committee should at least be held to discuss the fiscal stimulus package.”
Last week, Congress leader Rahul Gandhi asked Modi to reconsider the package and emphasised the need to directly transfer money to the people’s accounts. Gandhi said the Centre should stop acting like a “money lender” by giving the poor credit instead of cash.
The five tranches focus on the Micro, Small and Medium Enterprises sector, alleviating the plight of migrant workers, improving agricultural infrastructure and allied industries, coal mining and defence manufacturing and allocations under the Mahatma Gandhi National Rural Employment Guarantee Act.
On Monday, United States multinational investment bank Goldman Sachs predicted that the Indian economy will experience the worst recession ever, due to the nationwide lockdown. On April 28, Moody’s Investors Service had cut India’s growth forecast for the year 2020 from 2.5% to 0.2%. The agency also projected that all advanced economies of the G20 group would shrink by 5.8% during the year.
Meanwhile, the migrant crisis continues to worsen in the country as the Centre has now extended the lockdown till May 31. With no work and lack of resources, many migrant workers have been walking back to their hometowns.
The Centre started running ‘Shramik Special’ trains from May 1. However, many still continue their gruelling journeys on foot, cycles, or any other means of transport they can find. Some have died on their way, while a few others died in accidents.
India has so far recorded 96,169 cases of coronavirus, according to the Ministry of Health and Family Welfare. Over 3,029 people have died.