‘Announce Revised Fiscal Stimulus’: Chidambaram on Govt’s Package

Announce Revised Fiscal Stimulus: Chidambaram to Govt’s Package.

(Photo: PTI)

Addressing a virtual press conference, senior Congress leader and former Finance Minister P Chidambaram on Monday, 18 May, said, “The fiscal stimulus is of Rs 1,86,650 crore amounting to 0.91 percent of GDP. It is totally inadequate given the gravity of economic crisis.”

“We note with deep regret that fiscal stimulus package has left several sections high and dry,” he added.

Finance Minister Nirmala Sitharaman on Sunday, 17 May, announced the last tranche of the economic package under the ‘Atmanirbhar Bharat Abhiyan’ announced by Prime Minister Narendra Modi with several relief measures for rural employment, education, business and healthcare sectors.

Expressing his disappointment with the package, he requested the government to reconsider.

He said, “We have carefully analyzed the contents of the five tranches. We have also looked into the analyses put out by various economists, experts, agencies and banks and the total package announced is Rs 1,86,650 with only Cash transfers, Rs 33,000 crore and free grain of Rs 60,000 crore.”

‘Borrow More, Spend More’

Chidambaram further said, “announce comprehensive fiscal stimulus of not less than Rs 10 lakh crore of real additional expenditure equivalent to 10 percent of GDP.”

He highlighted the need to “borrow more, spend more” to give a stimulus to the economy.

“Government is being opportunistic by pushing reforms, it is bypassing discussion in Parliament and this will be resisted. I think govt is deliberately sidelining Parliament.”

P Chidambaram, former Finance Minister

Chidambaram said that FM acknowledged that Additional Expenditure must be financed by Additional Borrowing. “The true value of the fiscal stimulus package will, therefore, 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. The truth cannot be hidden for long,” he said.

Meanwhile, giving the final break up of the package, Sitharaman on Sunday said, “The overall stimulus package under the Atmanirbhar Bharat Abhiyan: Rs 20,97,053 crore.”

She said that the government to allocate an additional Rs 40,000 crore to MGNREGA to provide an employment boost.

“Technology-driven education to be the focus. PM eVIDYa programme for multi-mode access to digital/online education to be launched immediately. Top 100 universities will be permitted to automatically start online courses by 30 May 2020.”