Former finance minister P Chidambaram on Monday expressed "deep regret" that the government's fiscal stimulus package has "left high and dry" several sections, including 13 crore families in the bottom half of the population, migrant workers and farmers.
"We express our thorough disappointment and request the government to reconsider the stimulus package and announce a revised and comprehensive fiscal stimulus package of not less than Rs 10 lakh crore of real additional expenditure, equivalent to 10% of GDP," he told a news conference via video conference.
The senior Congress leader said a fiscal stimulus of Rs 1,86,650 crore, amounting to barely 0.91% of GDP, will be "totally inadequate given the gravity of the economic crisis and the dire situation" in which people find themselves because of the Covid-19 crisis.
"Most analysts, rating agencies and banks have placed the size of the fiscal stimulus at between 0.8 to 1.5%," he said.
Following Prime Minister Narendra Modi's announcement of a Rs 20-lakh crore stimulus package on May 12, finance minister Nirmala Sitharaman gave details of that package in five tranches over as many days.
Chidambaram said he and the Congress have carefully analysed contents of the five tranches and looked into analyses put out by economists, experts, agencies and banks.
"We note, with deep regret, that the fiscal stimulus package has left several sections high and dry, including the bottom half of the population (13 crore families), migrant workers, farmers, landless agricultural labour, daily wage non-agricultural labour, workers who have been laid off or retrenched, workers in unorganised or unregistered businesses and units who have lost their jobs, self-employed who have no work, seven crore shopkeepers, lower middle class families who have run out of cash and are forced to borrow, and 5.8 crore MSMEs," he explained.
Chidambaram said the finance minister had acknowledged that additional expenditure must be financed by additional borrowing.
"The true value of the fiscal stimulus package will 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," he said.
"Let me state categorically that there can be no fiscal stimulus to the economy without additional expenditure over and above the budgeted expenditure," he added.
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