The Union government’s ₹20 lakh crore economic stimulus package managed to grab headlines but was a ‘cruel blow to the the poor and devastated migrant workers’, senior Congress leader and former Union Finance Minister P. Chidambaram said on Wednesday.
Addressing a joint online press conference with Randeep Surjewala, he said that except a modest package for the MSME (micro, small and medium enterprises) sector, the details of the package announced by Union Finance Minister Nirmala Sitharaman were ‘disappointing’.
The total stimulus package for the MSMEs amounted to ₹3.6 lakh crore but ‘where is the remaining ₹16.4 lakh crore,’ he wondered.
‘Cruel blow’
Mr. Chidambaram said, “Let me first point out that there is nothing in what the FM said today for the lakhs of poor, hungry and devastated migrant workers 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. 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.”
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“The FM announced some support measures for the 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 [Rs 20,000 crore] and equity corpus fund [Rs 10,000 crore] but we will await the ‘terms and conditions’.
The devil is in the detail,” he said.
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“Except for the modest MSME package, we are disappointed with today's announcements,” he noted. “Where is the rest of the Rs 16.4 lakh crore? This government is a prisoner of its own ignorance and fears.”
Demand issue
Besides the incentives for the MSME sector, there was nothing in the package that could stimulate demand, said the Congress leader.
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The government should not be unduly bothered about running up a high fiscal deficit and could monetise part of the deficit if it reached a worrying level, he added.
More spending
“The government must spend more but it is not willing to do so.” The States should also be allowed to borrow more, he said.
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Asked about the BJP-ruled States like Uttar Pradesh, Madhya Pradesh and Gujarat suspending labour laws, he said,“Drastic changes in labour laws that have been in existence from 1948 or so must not be done in a crisis situation. They should be done when normalcy returns and after consulting the stakeholders”.
