West Bengal Finance Minister Amit Mitra called the Rs 20 lakh crore stimulus package announced by Prime Minister Narendra Modi amidst the coronavirus-induced crisis as ‘deeply misleading’ and raised questions regarding lack of direct stimulus payment for the poor amid the pandemic.
Speaking exclusively to CNN-News18, Mitra said, “The Rs 20 lakh crore economic package announced by the Centre is deeply misleading. As the Prime Minister of the world’s largest democracy, shouldn’t the measures be shared in a more clarified manner?”
He said, “Now according to the relief package, the monitory stimulus of liquidity injection started on February 6 by the Reserve Bank of India (RBI). It was followed by three other injections, one on March 27, the second on April 17 and then the other on April 27. The total amount of this monitory liquidity injection amounted to Rs 8.04 lakh crore.
Describing the liquidity injection as “obviously hidden” inside the massive stimulus package, he said he was expecting Modi to clarify that out of the Rs 20 lakh crore, the RBI had already initiated Rs 8.04 lakh crore of monitory stimulation.
“People are listening without realising that this is not a ‘stimulus package’ but are measures taken by the RBI to give banks the extra push for them to lend. But today with supply chains broken - how many companies will rush to the banks to borrow this money when there is a lockdown in place?”
Bringing another contrasting fiscal measure into focus, Mitra pointed out that the fiscal stimulus of Rs 1.7 lakh crore announced by the Union Finance Minister Nirmala Sitharaman on March 27 had also been included into the Centre’s economic package.
“To sum up, the Rs 8.04 lakh crore of monitory relief initiated by the RBI and the Finance Ministry’s fiscal stimulus of Rs 1.7 lakh crore amounts to little less than Rs 10 lakh crore package (Rs 9.74 lakh cr) and not Rs 20 lakh crore package as claimed by the Centre.”
"Another Rs 4.2-lakh crore is the additional borrowing limit that has been created by the Centre, which in reality is just 2 per cent of the country’s GDP,” he noted.
He also raised questions regarding lack of direct benefit transfer of aid to the affected people who lost their jobs in unorganised sectors and those are struggling to make their ends meet amid the lockdown.
As state economies near the brink of collapse Mitra said, “The Centre has been alerted to support governments for faster release of Goods and Services Tax (GST), expanding borrowing limits and other pending dues. But unfortunately, all our demands to keep the state economy going has been overlooked. How will states survive?”
Calling the situation alarming, he said: "the Centre must release our dues at the earliest before the crisis deepens."