Q/Did the prime minister mislead the country about the size of the fiscal stimulus, or is it a case of a difference in opinion on what constitutes such a package?
A/There cannot be any difference on what constitutes fiscal stimulus. The phrase has only one meaning, universally. It is the amount of money that the government will spend from the exchequer to stimulate demand in the economy. In our analysis of the package, the stimulus is only Rs1,86,650 crore. The inflated number of ‘Rs20 lakh crore’ is the usual hype of the BJP government to capture a headline and put out a false narrative.
Q/You said the government is a prisoner of its own ignorance and fear.
A/The government is woefully short of persons who understand macroeconomic management, hence ignorance. The government has an irrational fear that rating agencies will downgrade India’s credit rating if it breaches the self-imposed limit of fiscal deficit, hence fear.
Q/What should have been the priority areas in the fiscal stimulus effort?
A/The priorities should have been cash transfer to the bottom half of the population, which is 13 crore families, for two months; cash in the hands of every migrant worker; cash transfer to tenant farmers, besides owner farmers; wage-assistance fund for registered micro, small and medium enterprises who will retain their workers; wage-protection programme to low-salaried employees; credit-guarantee fund to all registered MSMEs; universal public distribution system; and free grain of 10kg per person in every family that wants grain for four months.
Q/Major privatisation reform measures were announced in areas such as coal, defence, space and atomic energy. Do such steps belong in a financial assistance package to tide over the impact of Covid-19?
A/Certainly not. The government is opportunistic. Such reforms must be detailed in policy papers. There should be stakeholders’ consultation, draft legislation, discussion in parliamentary committees, and finally debate and passage in Parliament.
Q/The government has allocated an additional Rs40,000 for the Mahatma Gandhi National Rural Employment Guarantee Scheme.
A/The BJP government that denigrated MGNREGS as a “monument to the failure of Congress governments” has acknowledged that it is the best safety net designed so far in India. If more work is demanded by the people and more money is required, that money should be provided.
Q/How is the Congress planning to take up the lacunae in the fiscal package?
A/We will press for a revised and comprehensive fiscal stimulus package of not less than Rs10 lakh crore of additional expenditure over and above the budgeted expenditure of Rs30,42,230 crore in 2020-2021.
Q/Is an urgent Parliament session required to debate the issues involved?
A/Yes. As many as 23 parliaments around the world have met live or virtually. India’s parliamentary standing committees must meet immediately—if necessary, virtually. Parliament must be convened in June.