New Delhi: After the central government announced five tranches of the economic package, former Union Finance Minister P. Chidambaram has expressed "thorough disappointment" and has requested the government to reconsider the stimulus package and announce a revised and comprehensive fiscal stimulus package.
Chidambaram said, "The Comprehensive Fiscal Stimulus Package of not less than Rs 10 lakh crore of real Additional Expenditure equivalent to 10 per cent of the GDP should be announced."
"There can be no fiscal stimulus to the economy without Additional Expenditure over and above the Budgeted Expenditure," added Chidambaram.
"In our view, 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. Most analysts, rating agencies and banks have placed the size of the fiscal stimulus at between 0.8 to 1.5 per cent," said Chidambaram.
He said, "We have carefully analyzed the contents of the five tranches. We have also looked into the analyses put out by various economists, experts, agencies and banks and the total package announced is Rs 1,86,650 with only Cash transfers, Rs 33,000 crore and free grain of Rs 60,000 crore."
The former minister said the rest of the announcements included already budgeted expenditure, front loading of some budgeted expenditure, regulatory measures, a number of liquidity measures, medium to long term plans/schemes, and proposed reforms.
Chidambaram said 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," he said.
The Congress said 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 and landless. There is nothing for agricultural labour, daily wage non-agricultural labour, workers who have been laid off or retrenched in unorganized or unregistered businesses units who have lost their jobs, self-employed who have no work, 7 crore shopkeepers, lower middle class families who have run out of cash and are forced to borrow and 5.8 crore MSMEs.