Congress seeks fresh economic package
The Congress on Monday said the government’s stimulus package barely equalled 0.91 per cent of the GDP rather than 10 per cent as Prime Minister Narendra Modi had claimed, and said it had given nothing to the states, the poor or even big industry.
Former finance minister P. Chidambaram alleged the government was apathetic and smug because the general election was four years away.
“The states should have been given grant-in-aid but even their borrowings are hedged with conditions. The poor got nothing. The big industrialists call me to say they are getting nothing,” he said.
“We ask 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.”
Chidambaram said: “The additional expenditure (in the current stimulus package) over and above the amount of Rs 30,42,230 crore in the Expenditure Budget for 2020-21 is Rs 1.86650 lakh crore…. This is based on our calculation, views of economists, banks and experts. This is less than 1 per cent of the GDP.
“The rest of the announcements included already budgeted expenditure, frontloading of some budgeted expenditure, regulatory measures, a number of liquidity measures, medium to long-term plans and schemes, and proposed reforms. We will comment on these in due course.”
Chidambaram argued that there can be no fiscal stimulus to the economy without additional expenditure over and above the budgeted expenditure.
“We also note, with deep regret, that the fiscal stimulus package has left several sections high and dry, including the bottom half of the population (13 crore families); migrant workers; farmers; landless agricultural labour; daily wage non-agricultural labour; workers who have been laid off or retrenched; workers in unorganised or unregistered businesses or units who have lost their jobs; the self-employed who have no work; 7 crore shopkeepers; lower-middle-class families who have run out of cash and are forced to borrow; and the 5.8 crore MSMEs (micro, small and medium enterprises).”
Asked about the Congress’s suggestions being ignored, Chidambaram said: “The government listens only to its own opinion. Let them point out one economist who said liquidity is fiscal support. They live in an echo chamber and listen to their own voice only.”
On a question whether the fear of rating agencies downgrading India had stayed the government’s hand, he said: “Rating agencies don’t run the government and the country. Every country is facing recession, not only India. If demand grows, the GDP picks up; why would rating agencies downgrade us? This is an irrational fear.”
Chidambaram said the Congress would challenge and resist every questionable move by the government, including the opening of sensitive sectors to private players and the sale of PSUs.
He accused the government of taking decisions recklessly without thinking of the consequences, and bypassing stakeholder consultations and Parliament.
Asked why the Opposition was not mounting pressure, he said: “We have written to the Lok Sabha Speaker and the Rajya Sabha Chairman to start parliamentary committees. The committees of finance, labour and commerce would like to discuss this stimulus package.
“The government is deliberately sidelining parliamentary institutions citing a silly rule of confidentiality. But in the lockdown period, what else can we do? Should we launch a virtual dharna?”