‘Stimulus package, a cruel blow to those who toil’

The Opposition parties are disappointed with the economic stimulus package announced by the Finance Minister Nirmala Sitharaman on Wednesday. The Congress said there is nothing for the lakhs of poor, hungry and devastated migrant workers. According to the Left parties Sitharaman has announced a bailout package for corporate houses.

Addressing reporters, former Finance Minister P Chidambaram said there was nothing for those who have walked — and many thousands are still walking — back to their home States. “This is a cruel blow dealt to those who toil every day,” he said.

He said as intended by the Centre, Prime Minister Narendra Modi’s announcement of a package worth ₹20 lakh-crore to re-start the stalled economy grabbed the headline.

‘Disappointed’

“The page, however, was blank. We were promised that the details of the fiscal stimulus package would be announced by the Finance Minister over the next few days, beginning today (Wednesday). It was therefore with great expectations that I listened to the FM at 4 pm today,” he said.

“There is also nothing by way of cash transfer to the bottom half of the population (13-crore families) who have been pushed into destitution. Only yesterday, Thomas Pikketty (French Economist) pleaded for cash transfers to the poor. The FM announced some support measures for MSMEs, although my comment is the measures were skewed in favour of the larger MSMEs (about 45 lakh MSMEs). I think the bulk of the 6.3 crore MSMEs were left high and dry. We welcome the offer of subordinate debt (₹20,000 crore) and equity corpus fund (₹10,000 crore), but we will await the ‘terms and conditions’. The devil is in the detail,” Chidambaram said.

On the credit guarantee fund, he said, it is not the entire Fund that will be actually spent. “The expenditure will be limited to the extent of NPAs in the outstanding guaranteed credit to MSMEs. Assuming an NPA level of 20-50 per cent, the actual expenditure over the period of the loans (which may be years)will be a maximum of ₹3,00,000 crore,” he said.

The Rajya Sabha MP said liquidity related measures do not amount to fiscal measures of support and nowhere in the world are they included or counted in a fiscal stimulus package. ‘Where is the rest of the ₹16.4 lakh crore? This government is a prisoner of its own ignorance and fears. The government must spend more, but it is not willing to do so. The government must borrow more, but it is not willing to do so. The government must allow States to borrow more and spend more, but it is not willing to do so. Except for the modest MSME package, we are disappointed with today’s announcements,” he said.

“No new spending was announced. Just liquidity infusions and loan guarantees to MSME, NBFCs and Power discoms. Bailout for the corporates, Nothing for the People!” the CPI(M) said in Twitter.