The announcements made by the Centre under the Atmanirbhar Bharat Abhiyan amount to an effective fiscal stimulus of Rs 1,86,650 crore, which is just 0.91 per cent of the Gross Domestic Product (GDP), former Union Finance Minister P. Chidambaram said on Monday. Further, he demanded that the Modi government should announce a revised package of not less than Rs 10 lakh crore.
“In our view, a fiscal stimulus of Rs 1,86,650 crore amounting to barely 0.91 per cent of GDP will be totally inadequate given the gravity of the economic crisis and the dire situation in which people find themselves. Most analysts, rating agencies and banks have placed the size of the fiscal stimulus between 0.8 to 1.5 per cent,” Chidambaram said in a media briefing on Monday.
He said the Congress has carefully analysed the contents of the five tranches announced by Finance Minister Nirmala Sitharaman, which the government claims amount to Rs 20 lakh crore, and looked into the analyses put out by various economists, experts, agencies and banks, to form a considered opinion that only a few of the measures qualify as fiscal stimulus steps over and above the amount of Rs 30,42,230 crore in the Expenditure Budget for 2020-21.
According to Chidambaram, the items that qualify as fiscal stimulus measures over and above the expenditure budget amount to a total of Rs 1,86,650 crore. “Let me state categorically, there can be no fiscal stimulus to the economy without additional expenditure over and above the budgeted expenditure,” he said.
The former finance minister said the fiscal stimulus package has left several sections high and dry, including the bottom half of the population, 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 who have lost their jobs, the self-employed who have no work, seven crore shopkeepers, lower middle class families who have run out of cash and are forced to borrow and 5.8 crore MSMEs.
“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 the GDP,” Chidambaram said.
The veteran leader said party leaders in the states will stress upon how the package announced by the government is an eyewash and does not provide them with any relief. “The government is largely guided by the privileged sections. It is the new Khan Market gang. It is complacent and smirks because elections are four years away. If the migrant workers could vote today, they would vote resoundingly against this government,” Chidambaram said.
On the government's decision to expand the scope of MGNREGA and provide more funds for the scheme, he reminded Prime Minister Narendra Modi of his statement after he took charge in 2014 that he wanted to keep the employment programme alive only so that it served as a monument to Congress' failures. “These words will come back to haunt them. Now, it is proving to be a safety net for the poor of this country,” he said.
Chidambaram accused the government of being opportunistic in the manner of announcements made, saying they had bypassed the stakeholder consultations, the requirement for a legislative process and discussion in Parliament. “All this will be resisted and challenged. We will have to read the fine print,” he said.
Reacting to Sitharaman's criticism of Congress leader Rahul Gandhi for his meeting with migrant workers, he said such comments deserved to be rejected with contempt. “Rahul Gandhi went to meet migrant workers. Show me one central minister who went to meet migrant workers... What could (s)he do to help them? He can only arrange for buses to take them home, which he did. The police tried to swoop in and arrest them, but better counsel prevailed, and they were allowed to go,” he said. “These are comments which do not deserve an answer. These are to be rejected with contempt. I request the finance minister to respond to questions in a more mature and seasoned manner,” he said.
