New Delhi [India], May 14 (ANI): Former finance minister and senior Congress leader P Chidambaram on Wednesday said that apart from a couple of liquidity and regulatory measures, there is no fiscal support for the middle class in the announcement made by Finance Minister Nirmala Sitharaman.
“There is nothing in today’s announcement for the middle class. I assume when you say middle class, you are referring to the tax-paying middle class as well as the non-tax paying middle class, which means people who have an income of about say Rs 2.5 lakhs to Rs 3 lakhs a year to about Rs 10 lakhs a year. Now for them, there is nothing,” Chidambaram said.
“TDS has been reduced, but that’s only a deferment of tax liability. It’s a liquidity measure, it’s not fiscal measure. The date of filing has been extended. That’s a regulatory measure. So, apart from a couple of liquidity and regulatory measures, there is no fiscal support for the middle class,” he added.
Chidambaram stated that he is “not surprised” by this. “When the government is not willing to lend fiscal financial support to the poorest classes, including the migrant workers, how do you expect this government to provide fiscal financial support to the middle class?
They have forgotten the poorest classes completely and they are on the way to forgetting the middle class also,” he said. On a question over fiscal deficit, Chidambaram said, “This is not a time to worry too much about the fiscal deficit. The additional borrowing that the government announced on May 8 will anyway take the fiscal deficit to about 5.3 or 5.4 per cent, assuming that the GDP remains constant.
The GDP will decline and therefore the fiscal deficit will even go up. And if the fiscal deficit reaches a point where it becomes worrying for other reasons, the answer is to monetise part of the fiscal deficit.” Chidambaram also stated that the government is “refusing to acknowledge there is a huge humanitarian crisis, something which India has not seen since 1948.”
“This is the biggest human and humanitarian crisis that India has faced. The government refuses to acknowledge it,” he said. Finance Minister Sitharaman today announced a series of liquidity measures for millions of small businesses reeling under the impact of COVID-19Â lockdown, including collateral-free automatic loans worth Rs 3 lakh crore.
Borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover will be eligible. These loans will have a four-year tenure and have a moratorium for 12 months on principal payment. There will be a 100 per cent credit guarantee cover to banks and non-banking finance companies on principal and interest.
The scheme can be availed till October 31. During his address to the nation on Tuesday, Prime Minister Narendra Modi had announced a stimulus package totalling Rs 20 lakh crore to rescue the economy reeling under the impact of coronavirus . This amounts to nearly 10 per cent of India’s GDP.
Self-reliant economy depends on whether farmers, working-class is self-sufficient
A day after Prime Minister Narendra Modi gave a call for building ‘Atmanirbhar Bharat ‘ (self-reliant India), senior Congress leader P Chidambaram said that a self-reliant economy will depend on whether farmers are self-reliant and working-class are self-sufficient.
“Nobody opposes self-reliance, but a self-reliant nation, a self-reliant economy will depend upon whether their farmers are reasonably self-reliant and self-sufficient, whether the working class is reasonably self-reliant and self-sufficient.
Today, what we see before us is that farmers have been left to fend for themselves… Farmers across states have lost their produce for many reasons, procurement is slow and procurement price is not being given to everyone,” Chidambaram, a former Finance Minister, said. He added, “The PM-KISAN applies only to 8.2 crore landlord farmers.
The tenant farmers and the landless agricultural labourers or the farmers have been left to fend for themselves. The working class, especially the poorest working class, has been left to fend for themselves. With these sections, which make up about 60-65 per cent of India’s population are not reasonably self-reliant or self-sufficient, what is the use of this slogan and what is the use of this hashtag?”
He went on to say that these are “publicity oriented measures.” “How many hashtags has this government come up with in the last six years? If you count them, it will probably come to hundreds. This hashtag also will be forgotten in a couple of months and (then) there will be a new hashtag,” Chidambaram said.
Govt is a prisoner of its own ignorance, fears
Former Finance Minister and senior Congress leader P Chidambaram on Wednesday said that except for the “modest MSME package,” he is disappointed with announcements made by Finance Minister Nirmala Sitharaman and alleged that the government is a prisoner of its own ignorance and fears.
“Except for the modest MSME package, we are disappointed with today’s announcement,” Chidambaram said. He said “there is nothing” in what the Finance Minister 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. Only yesterday, Professor Thomas Pikety pleaded for cash transfers to the poor,” he said.
Referring to measures for MSMEs, Chidambaram said 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. On the credit guarantee fund, it is not the entire fund that will be actually spent.
The expenditure will be limited to the extent of NPAs in the outstanding guaranteed credit to MSMEs,” Chidambaram said. “Assuming an NPA level of 20-50 per cent, the actual expenditure over the period of the loans (which may be years) will be a maximum of Rs 3,00,000 crore. We will also count the Rs 30,000 crore credit guarantee to NBFCs.
We will, therefore, include Rs 3,60,000 crore in the Rs 20 lakh crore package,” he added. Chidambaram refrained from commenting on liquidity related measures. “Such measures do not amount to fiscal measures of support and nowhere in the world are they included or counted in a fiscal stimulus package,” he said.
“Where is the rest of the Rs 16.4 lakh crore? This government is a prisoner of its own ignorance and fears. The government must spend more, but it is not willing to do so. The government must borrow more, but it is not willing to do so.
The government must allow states to borrow more and spend more, but it is not willing to do so,” he added. Prime Minister Narendra Modi had on Tuesday announced a Rs 20 lakh crore comprehensive special economic package to help various sections and MSMEs. (ANI)
