Congress and other opposition parties said Wednesday that the Centre’s stimulus package is incapable of helping poor migrants, the poorest and even state governments affected by the financial crisis. They stated that the package would not help to stimulate demand and consumption.
P. Chidambaram, a high-ranking congressman, said it takes time to put money in the pockets of citizens, especially the poorest 130 million, but nothing is planned for them. Before announcing the package, he christened the announcement of the first one with a title and a blank page. Later he said there was nothing in the school bag.
According to his generous estimates, the indicated package amounts to Rs.3.6 trillion, with a stimulus of Rs.20 trillion promised by the Prime Minister.
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Where are the remaining 16.4 trillion rupees? This government is a prisoner of its own ignorance and fear, he said. Chidambaram said that not only should the government spend more and take out more loans and let the states do it, but it doesn’t want to do it. In addition to the modest package of measures for SMEs, we are disappointed with today’s announcements, he said. Liquidity measures are not the same as fiscal support measures, Chidambaram said, and nowhere else in the world are they included or accounted for in the stimulus package.
The Prime Minister of West Bengal, Mamata Banerjee, said the Centre’s package was a big zero and a front. People get no financial support, the state gets nothing. There is no public spending to stimulate the economy and there are no signs of development in the health infrastructure, Banerjee said.
The leader of the Indian Communist Party (Marxist) Sitaram Yehuri called the package a farce. He said the country is going through the smallest form of Maudie’s government policy. He said there is nothing for state governments or migrants who need urgent and indispensable help. Mr Chidambaram explained that the announced IHR support measures were skewed in favour of the larger IHR, some 4,5 million, while most of the IHR 63 million remained high and dry.
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He welcomed the proposal to set up a fund for subordinated debt and shares. But we’re waiting for the terms. The devil in detail. Chidambaram said he rejects changes in labour law in this time of crisis. According to him, this is also not the time to worry about the budget deficit and the additional credit taken up by the government from March onwards will bring it to 5.3-5.4% if GDP remains at the same level, but GDP will fall. The answer, he said, is to monetize part of the budget deficit. In his view, the government should give the money to the poorest sections of the population and then start solving problems from a sectoral perspective.
M. Chidamabaram said he hoped that the Ministry of Finance would take note of the previously announced withdrawal of Rs.1.7 trillion as it was actually Rs.1 trillion, of which Rs.60,000 was money transfers. He welcomed the change in the definition of RSI. He said we should not confuse foreign names with products of foreign origin because even some foreign brands are produced entirely in India by local entrepreneurs and labour collectives. According to Mr Banerjee, the package costs only Rs 4.2 trillion, or about 2% of GDP. According to Banerjee, this should not be regarded as a benefit because the tax return is linked to the benefits. If people can’t get out because of a blockade, where do they have to ask for a refund? It’s all right. It’s all right.
Kerala Finance Minister Thomas Isaac said that while the package is a fair model, the Rs.20 trillion stimulus package would be deeply disappointing. The actual cash outflow directly from the budget is only about Rs. 30.000. At least the interest payments to the RSI sector could have been eliminated during the moratorium, he said.