Former Union finance minister P. Chidambaram is of the view that perhaps India was late in initiating a nationwide lockdown. The veteran leader is not happy with the Rs15,000 crore package announced by the Narendra Modi government to fight Covid-19. According to his calculations, the size of the financial package should have been around Rs5 lakh crore. Excerpts:
Q/The nationwide lockdown for 21 days is something that you have been demanding. Have we acted in time to avert a disaster?
A/Only time will tell us if we acted in time. Many epidemiologists, and eminent doctors like Dr Devi Shetty, had pleaded for an immediate lockdown since the second week of March. I was echoing their views. Although the Centre did not announce a nationwide lockdown, the states, one by one, took that decision. Between March 20 and March 23, practically all the states had declared a lockdown. The Centre announced a 21-day lockdown only on March 24. I am angry, relieved, happy, disappointed and fearful.
Q/The prime minister has announced a financial package of Rs15,000 crore to fight Covid-19.
A/The [package of] Rs15,000 crore is only for the immediate health care needs. Even this will be spent over a few weeks or months. This is not the financial package that has been demanded by economists and experts. According to my calculations, the size of the financial package will be in the order of 05 lakh crore.
Q/Has the government reached out to the opposition to prepare a coordinated plan to deal with the coronavirus threat?
A/Not at all. The [Union] government held a video conference with the chief ministers only on March 20. The government has not called the opposition parties for a discussion so far on Covid-19. There was no discussion in Parliament either.
Q/Are you satisfied with the level of coordination between the Centre and the state governments?
A/I am partly satisfied. I am not satisfied that the Centre has not yet responded to the request of the states for financial assistance. It seems to me that the state governments, realising that they would be answerable ultimately, have taken their own decisions and are dipping into their own resources.
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Q/There has been criticism that the Modi government did not end the Parliament session fast enough.
A/Why did the government hold back the Finance Bill from the Lok Sabha for over a week? I think the government did not want Parliament to be adjourned for the fear that the Madhya Pradesh Assembly would be adjourned citing that example, before the Congress government sought a vote of confidence. Their priority appeared to be to oust the Madhya Pradesh government.
Q/Do you feel that Covid-19 will have a long-lasting impact on the economy?
A/There will be economic pain for all sections of the people, especially the poor, the agricultural workers, the daily workers, employees in the informal sector, small and medium-sized enterprises and the self-employed. The short-term impact will be severe. As for the long-term impact, that will depend upon the measures that the government and the RBI will take. India’s GDP growth rate could dip further up to 2 per cent.
Q/The government has announced some steps, including income tax and GST relaxations, relief for importers and exporters, and relaxation under the insolvency and bankruptcy code.
A/The announcements made by the finance minister on March 24 [were] related to procedural aspects of compliance with the current laws and regulations. I do not think the finance minister announced any substantive changes in the laws.
Q/Has enough been done to help the poor during this crisis? Should NYAY (the social welfare programme proposed in the Congress’s election manifesto), may be by some other name, be one of those steps?
A/Not yet. I sincerely hope the government will take some ideas out of the many in the public domain. I have made many suggestions in my tweets, interviews and columns. A direct cash transfer to a section of the people (20 or 30 or 40 per cent of the total number of families) is imperative. Distribution of food grains, free [of cost], to any family that wants food grains, will also be required. There is no better idea on the table than NYAY. Let the government modify NYAY as it wishes and implement some kind of cash transfer to the poor. NYAY is not a bad word.