Chidambaram also hit out at PM Modi and Finance Minister Nirmala Sitharaman, urging them to rethink about Rs. 20 lakh crore relief package
NEW DELHI| Congress Leader P Chidambaram lashes out at Reserve Bank of India, advising RBI should “bluntly tell the government to do your duty (and) take fiscal measures” to protect and re-start a national economy affected due to coronavirus outbreak.
Chidambaram also hit out at PM Modi and Finance Minister Nirmala Sitharaman, urging them to rethink about Rs. 20 lakh crore relief package that “has the fiscal stimulus of less than 1 per cent of GDP”. PM Modi in his announcement claimed the package is worth 10% of the GDP.
Chidambaram said, “Governor Shaktikanta Das says demand has collapsed, growth in 2020-21 headed toward negative territory. Why is he then infusing more liquidity? He should bluntly tell the government ‘Do your duty, take fiscal measures’.”
Congress veteran leader questioned, “Even after RBI’s statement, is the PMO or Nirmala Sitharaman lauding themselves for a package that has the fiscal stimulus of less than 1 per cent of GDP?”
RSS should be ashamed of how the government has dragged the economy into negative growth territory.
— P. Chidambaram (@PChidambaram_IN) May 23, 2020
The former finance minister comment came a day after RBI said GDP could contract further than it has this year and “is estimated to remain in negative territory” in the next.
On Friday while briefing the media RBI Governor Shaktikanta Das said 40 basis point reduction in the repo rate, dropping it from 4.4% to 4%. Along with reduction an extension of the moratorium on loan repayments till August is extended to infuse liquidity into the economy to create demand.
P Chidambaram has criticized the Modi’s government 20 lakh crore package from the day of the announcement. Stating it as “has left several sections high and dry”.
Chidambaram said, “…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.”
Amid claims the relief package doesn’t amount to Rs 20 lakh crore, the government, this week, shared a break-up of the sums involved that, according to its calculations, amount to Rs 20,97,053 crore.