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Economic package ‘hopelessly inadequate’, says Chidambaram

Economic package ‘hopelessly inadequate’, says Chidambaram
P Chidambaram
NEW DELHI, MAY 18 (AGENCIES) | Publish Date: 5/18/2020 12:20:57 PM IST

Leading the charge against the government over the economic package announced to overcome the impact of the coronavirus pandemic, Congress leader P Chidambaram on Monday called it “hopelessly inadequate” while seeking a revised and comprehensive package of 10 per cent of the GDP.

“The fiscal stimulus package is hopelessly inadequate given the gravity of the economic crisis as it amounts to only Rs 1.86 crore, which is 0.91 per cent of the GDP,” the former finance minister said.

The Centre has unveiled a Rs 20 lakh crore economic relief package announced by Prime Minister Narendra Modi as part of the Atmanirbhar Bharat campaign while pushing new reforms in sectors such as agriculture, public sector enterprises, and defence production.

However, much of the Rs 20 lakh crore Covid-19 economic package has been liquidity driven, with little burden on the Central exchequer. It has been primarily aimed at pushing banks to extend credit on the back of government guarantees to sectors that fuel the economy — small businesses, non-banking financial companies, micro finance institutions and housing finance companies.

Chidambaram said the stimulus package had left several sections like the poor, migrants, farmers, labourers, workers, small shopkeepers and middle class high and dry.

“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 per cent of GDP,” Chidambaram said at a press conference through video-conferencing.

Chidambaram also accused the government of being opportunistic by pushing reforms and claimed that it was bypassing the Parliament.

“I think the government is deliberately sidelining Parliament. A meeting of the Parliamentary Committee should at least be held to discuss the fiscal stimulus package,” he said.

On Sunday, Congress leader Anand Sharma said the stimulus package had turned out to be “fraudulent” and “non-existential”, arguing that the fiscal cost of it is just 1.6% of the GDP and not 10 per cent as claimed by him.

“What has been given… adds up to Rs 3.22 lakh crore…It is 1.6 per cent of the GDP. It is much less than the 2 per cent of the GDP and not 10 per cent as the Prime Minister had very forcefully committed and announced,” Sharma said.

 

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