The fiscal stimulus package of Rs 20 lakh crore announced by Prime Minister Narendra Modi last week is between 0.7-1.3 percent of the GDP, not 10 percent as claimed by the Centre and others, alleged Congress leader Manish Tewari citing the data of various rating agencies and financial institutions.
— Manish Tewari (@ManishTewari) May 18, 2020
Putting up the figures of various raging agencies and financial institutions, Tewari tweeted,"This is what FII’s, banks , rating agencies are all saying about the stimulus package it is between 0.7-1.3 percent of the GDP, not 10 percent. Are they lying?"
Tewari claimed the average size of the fiscal package is just 1 percent of the Gross Domestic Product (GDP).
Earlier, former finance minister P Chidambaram said the fiscal stimulus package announced by the government is "hopelessly inadequate" given the gravity of the economic crisis as it amounts to only Rs 1.86 lakh crore, which is 0.91 percent of the GDP, reported PTI.
The Congress sought a revised and comprehensive package of 10 percent of the GDP.
Chidambaram said the stimulus package has left several sections like the poor, migrants, farmers, labourers, workers, small shopkeepers and middle class high and dry.
"In our view, 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," he said.
Chidambaram said most analysts, rating agencies and banks have placed the size of the fiscal stimulus between 0.8 to 1.5 per cent.
On Sunday, former union minister and Congress leader Anand Sharma accused the government of misleading people with its "trickery, fakery, quackery" and said the economic measures announced by the Centre amounted to only 1.6 per cent of India''s GDP, i.e. worth Rs 3.22 lakh crore instead of Rs 20 lakh crore as claimed by the prime minister.
The Congress has been demanding direct cash transfer to the accounts of poor to boost demand to which the Centre is yet to respond.
A report in The Indian Express said that the Rs 20-lakh crore package will affect the government’s finances only in a small way.
A large part of the package, or as much as Rs 8.04 lakh crore, is additional liquidity injected into the system by the Reserve Bank of India (RBI) through various measures in February, March and April, the report said.
Modi's pledge of a total spending of Rs 20 lakh crore to weather the fallout of coronavirus pandemic is among the largest economic stimulus package announced by nations around the world.
Modi's Atmanirbhar Bharat Abhiyan or Self-reliant India Mission is about 10 percent of India's GDP in 2019-20 and would rank behind Japan, the US, Sweden, Australia and Germany.
Of the Rs 20-lakh-crore package that Prime Minister Narendra Modi announced to defend the economy against coronavirus disruptions, fresh support may be only around 60 percent of the offer as it counts the first financial stimulus and liquidity support that Reserve Bank has given already, and will overburden bond market, a report said.
In March, India committed Rs 1.7 lakh crore ($22.6 billion) in COVID-19 related relief measures that included free foodgrains to poor and some cash to poor senior citizens and women. This was followed by Rs 3.7 lakh crore of liquidity support by the RBI in March and another Rs 2 lakh crore in April.
The RBI had last month said its measures provided support equivalent to 3.5 percent of the GDP.
---With PTI inputs
Updated Date: May 18, 2020 17:45:13 IST