The Congress, and other opposition parties, on Wednesday said the Centre’s fiscal stimulus package fails to provide succour to hapless migrants, to the poorest and even state governments confronted with a financial crunch. They said the package would not help in spurring demand and consumption.
Senior Congress leader P Chidambaram said the need of the hour was to put money into the pockets of the people, particularly the poorest 130 million people, but the package had nothing for them. He said there was nothing in the package for the middle classes.
Chidambaram said his “generous” calculation is that the package announced amounts to Rs 3.6 trillion in the Rs 20 trillion package that Prime Minister Narendra Modi promised on Tuesday.
“Where is the rest of the Rs 16.4 trillion? This government is a prisoner of its own ignorance and fears,” he said. Chidambaram said the government must not only spend and borrow more, and allow states to do it as well, but it is not willing to do so.
“Except for the modest MSME package, we are disappointed with today’s announcements,” he said. Chidambaram said liquidity related measures do not amount to fiscal measures of support and nowhere in the world are they included or counted in a fiscal stimulus package.
West Bengal Chief Minister Mamata Banerjee said the Centre’s package is a “big zero and an eyewash”. “People don’t get any monetary support, the states didn’t get anything. There is no public spending to boost the economy or no indication of boosting the health infrastructure was mentioned either,” Mamata said.
Communist Party of India (Marxist) chief Sitaram Yechury termed the package a farce. He said the country is witnessing “the pettiest form of politics from Modi government”. He said there is nothing in it for the state governments, or for the migrants, who urgently and immediately need help.
Chidambaram said the support measures announced for MSMEs were were skewed in favour of the larger MSMEs, about 4.5 million, while the bulk of 63 million MSMEs were left high and dry.
He welcomed the offer of subordinate debt and equity corpus fund. “But we will await the ‘terms and conditions’. The devil is in the detail,” he said.
Chidambaram said he opposed the labour law changes at the current juncture of the crisis. He said it was also not the time to worry about fiscal deficit, and the government’s additional borrowings since March will take it to 5.3 to 5.4 per cent if the GDP remains constant, but the GDP is set to decline. The answer, he said, was to monetize part of the fiscal deficit. He said the government should put money in the hands of the poorest and then start addressing issues sectorally.
Chidamabaram said he hoped the FM will note include the Rs 1.7 trillion announced earlier because that was effectively Rs 1 trillion, of which Rs 60,000 was cash transfer. He welcomed the change in the definition of MSMEs. He said we should not mix up foreign sounding brand names with foreign manufactured products as even several foreign brands were completely manufactured in India by local entrepreneurs and labour.
Banerjee said the package is only worth Rs. 4.2 trillion, around two per cent of the GDP. Over relaxations given on income tax filing, Banerjee said people mustn’t think it as a benefit. “If people aren’t able to go outside because of lockdown, from where are they going to file returns? It is nothing”.