Reacting to the government's coronavirus relief package, former finance minister P Chidambaram on Monday said that it has left several sections of society including migrant workers, farmers, among others "high and dry". Chidambaram asked the government to announce a revised stimulus of not less than Rs 10 lakh crore of real additional expenditure equivalent to 10 per cent of GDP. "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," Chidambaram said at the news conference held via video conference.
The veteran Congress leader also said that a fiscal stimulus worth Rs 1,86,650 crore, 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 due to the coronavirus pandemic. "Most analysts, rating agencies and banks have placed the size of the fiscal stimulus at between 0.8 to 1.5%," he added.
Prime Minister Narendra Modi last Tuesday announced a Rs 20 lakh crore economic package, equivalent to 10 per cent of India's GDP, for the country to become ''self-reliant'' and deal with the coronavirus crisis. Finance Minister Nirmala Sitharaman unveiled the finer details of the fiscal stimulus in five phases.
"We note that FM acknowledged that Additional Expenditure must be financed by Additional Borrowing. The true value of the fiscal stimulus package will, therefore, be known when we know what is the Additional Borrowing in 2020-21 to finance the Additional Expenditure over and above the Expenditure Budget of Rs 30,42,230 crore. The truth cannot be hidden for long," Chidambaram noted.
He added that the rest of the announcements include already front loading of some budgeted expenditure, regulatory measures, a number of liquidity measures, medium to long term plans or schemes, and proposed reforms.