After the central government announced five tranches of the economic package, former Union Finance Minister and Congress leader P Chidambaram expressed his disappointment at the package announced, calling it ‘hopelessly inadequate’. He requested the government to reconsider the stimulus package and announce a revised and comprehensive fiscal stimulus package.
“The package must be rejected as inadequate, the government must come up with a revised, comprehensive stimulus package where real additional expenditure is not less than Rs 10 lakh crore,” he said.
"There can be no fiscal stimulus to the economy without additional expenditure over and above the budgeted expenditure," added Chidambaram.
He also said that the stimulus package has left several sections like the poor, migrants, farmers, labourers, workers, small shopkeepers and middle class high and dry.
He said that the package has 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.
"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 per cent of GDP," he said at a press conference through video-conferencing.
Chidambaram said that as per the Congress, 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. Most analysts, rating agencies and banks have placed the size of the fiscal stimulus at between 0.8 to 1.5%, he added.
Chidambaram also accused the government of being opportunistic by pushing reforms. It is bypassing Parliament and a discussion on the package, and this will be strongly resisted, he added.
"I think the government is deliberately side-lining Parliament. A meeting of the Parliamentary Committee should at least be held to discuss the fiscal stimulus package," he said.
He said, "We have carefully analysed 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 the additional borrowing is 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.