Wednesday, 15 July, 2020
Exclusives - 29 March, 2020

Rs.1.7 lakh crore economic package good, but inadequate

The Rs.1.7 lakh crore economic packages announced by Finance Minister Nirmala Sitharaman for the vulnerable sections is a welcome step but it is inadequate in quantity and is short of expectations... #Economicpackagegoodbutinadequate

By Pervez Bari

The Rs.1.7 lakh crore economic packages announced by Finance Minister Nirmala Sitharaman for the vulnerable sections is a welcome step but it is inadequate in quantity and is short of expectations. It works out to 0.8% of the GDP. In the present circumstances anything under 3% of the GDP is totally inadequate. This too came after a delay of 15 days!

The financial packages are meant for farmers, women, construction workers, senior citizens, widows and the disabled. But it fails to cover all susceptible categories of the Indian society. However, the issue at hand is the urgency of monetary transfer to unorganised workers, who have not only lost their jobs and income, but also face a massive health scare. Bitter Truth: Many who have been hit still left out, and the relief is too little

It would be wrong to call these fiscal support measures as some kind of a stimulus. The additional expenditure was required to provide a safety net for workers — a compensation for loss of income — so that it greases the machinery for them to buy daily need items, mostly food. The government’s stimulus can kick in only after the economy is unlocked, about which there is little certainty now.

The Central government’s packages, as it is, have come a week after the Kerala government announced first Rs. 20,000-crore support for its people. Many states including Uttar Pradesh, Uttarakhand, Punjab, Telangana, Rajasthan and Madhya Pradesh followed suit.

Meanwhile, there is no evidence that the government has a plan for unorganised sector workers such as dhobis, rickshaw pullers, barbers, rural labourers etc. even if they are registered with their respective state governments. Neither for the construction workers who are not registered with states will be eligible.

It seems that the government and the economic gurus are trying to avoid the middle class working people who have regular EMI to pay. How is the relief fund going to help solve this issue? The working class is not getting salary to pay for their daily expenses, how they could pay the extra fine for late payment. It sounds like banks will enjoy an additional income in terms of mass fine for the non-payment of EMI. Surely Corona virus is in favour of Banks and money lending institutions. People are religiously following the guidelines of the government to stay at home but the government is not providing any notification to Banks that they should not impose any fine or waive the EMI which is easy mostly for the coming month. (To be continued…)

(The writer is a senior freelance journalist and the views expressed in this article are his own)

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