Thread by @INCIndia

LIVE: Congress Party briefing by Shri @PChidambaram_IN, former Union Finance Minister via video conferencing pscp.tv/w/cZDTVDFYSmpr…

Following the Prime Minister’s announcement of a Rs 20-lakh crore Stimulus Package on May 12, the Finance Minister filled in the details over a period of five days. She called them Five Tranches: @PChidambaram_IN

#SeedhiBaatPackageBakwas

We have carefully analyzed the contents of the five tranches. We have also looked into the analyses put out by various economists, experts, agencies and banks: @PChidambaram_IN

#SeedhiBaatPackageBakwas

In our considered opinion, only the following items qualify as Fiscal Stimulus Measures entailing Additional Expenditure over and above the amount of Rs 30,42,230 crore in the Expenditure Budget for 2020-21: @PChidambaram_IN

#SeedhiBaatPackageBakwas

Let me list the items:
1. Revenue lost due to tax concessions since 22-03-2020- ₹7500 cr
2. Pradhan Mantri Garib Kalyan Package
- Cash transfers- ₹33,000 cr
- Free grain- ₹60,000 cr
3. Medical and Health Infrastructure- ₹15,000 cr: @PChidambaram_IN

#SeedhiBaatPackageBakwas

4. EPF support for Businesses and Workers- ₹ 2,800 cr
5. Reduction of EPF rates- ₹ 6,750 cr
6. Free food grain for migrant workers for 2 months- ₹ 3,500 cr : @PChidambaram_IN

#SeedhiBaatPackageBakwas

7. Interest subsidy for MUDRA Shishu loans (assuming entire subsidy will be paid to banks in 2020-21)- ₹ 1,500 cr
8. Additional credit through KCC (assuming additional interest subsidy will be paid to lenders in 2020-21)- ₹8,000 cr: @PChidambaram_IN

#SeedhiBaatPackageBakwas

9. Top to total Operation Greens- ₹500 cr
10. Promotion of Herbal Cultivation for 2 yrs- ₹4000
11. Viability Gap Funding (assuming entire amount will be paid in 2020-21)- ₹8100 cr
12. Additional allocation for MGNREGA- ₹40000 cr: @PChidambaram_IN

#SeedhiBaatPackageBakwas

Total amounts to ₹1,86,650 crore. Rest announcements included already- budget expenditure, front loading of some budgeted expenditure, regulatory measures, number of liquidity measures, medium to long term plans, and proposed reforms: @PChidambaram_IN

#SeedhiBaatPackageBakwas

We will comment on these in due course. Let me state categorically: there can be no fiscal stimulus to the economy without Additional Expenditure over and above the Budgeted Expenditure: @PChidambaram_IN

#SeedhiBaatPackageBakwas

We note that Finance Minister acknowledged that Additional Expenditure must be financed by Additional Borrowing: @PChidambaram_IN

#SeedhiBaatPackageBakwas

True value of fiscal stimulus package will, therefore, be known when we know what is the additional borrowing in 2020-21 to finance the additional expenditure over and above the expenditure budget. The truth cannot be hidden for long: @PChidambaram_IN

#SeedhiBaatPackageBakwas

In our view, a fiscal stimulus of Rs 1,86,650 crore amounting to barely 0.91% of GDP will be totally inadequate given the gravity of the economic crisis and the dire situation in which people find themselves: @PChidambaram_IN

#SeedhiBaatPackageBakwas

Most analysts, rating agencies and banks have placed the size of the fiscal stimulus at between 0.8 per cent to 1.5 per cent: @PChidambaram_IN

#SeedhiBaatPackageBakwas

We also note, with deep regret, that fiscal stimulus package has left several sections high and dry, including:
1- bottom half of the population (13 crore families)
2- migrant workers
3- farmers
4- landless agricultural labour: @PChidambaram_IN

#SeedhiBaatPackageBakwas

5- daily wage non-agricultural labour
6- workers who have been laid off or retrenched
7- workers in unorganised or unregistered businesses/units who have lost their jobs
8- self-employed who have no work: @PChidambaram_IN

#SeedhiBaatPackageBakwas

9- 7 crore shopkeepers
10- lower middle class families who have run out of cash and are forced to borrow
11- 5.8 crore MSMEs: @PChidambaram_IN

#SeedhiBaatPackageBakwas

We express our thorough disappointment & request govt to reconsider stimulus package & announce a revised & comprehensive fiscal stimulus package of not less than ₹10 lakh crore of real additional expenditure equivalent to 10% of GDP: @PChidambaram_IN

#SeedhiBaatPackageBakwas

It's not the time to worry about fiscal deficit. If additional expenditure turns out to be another ₹10 lakh crore & additional borrowing is ₹10 lakh crore, obviously fiscal deficit will go up but that should not be a matter of worry: @PChidambaram_IN

#SeedhiBaatPackageBakwas

Many economists & central bankers have said if at some stage fiscal deficit is uncomfortable, monetise that part. Monetise 50% of fiscal deficit which is in excess of what you think should be there. I don’t think fiscal deficit is a worry:@PChidambaram_IN #SeedhiBaatPackageBakwas

Immediate concern must be to borrow more, spend more and give a fiscal stimulus to the economy: @PChidambaram_IN

#SeedhiBaatPackageBakwas

They are wrong on liquidity, they’re giving a spin. Liquidity works on the supply side. You give liquidity to banks to lend to say MSMEs that means MSMEs can supply more but there must be demand. Fiscal stimulus works on the demand side: @PChidambaram_IN
#SeedhiBaatPackageBakwas

I feel officers who were with FM know the difference but they were trying to obfuscate. FM didn't wish to explain difference between liquidity measures operating on supply side & fiscal stimulus measures operating on demand side: @PChidambaram_IN

#SeedhiBaatPackageBakwas

On allowing states to borrow there are so many conditions. One nation one ration card can be done in 2-3 months but others like ease of doing business, discom reforms will take time. States need to borrow now: @PChidambaram_IN

#SeedhiBaatPackageBakwas

If you don’t give States headroom to borrow more today & ask them to fulfill conditions, which may take upto Jan-Feb, what purpose will it solve? They need the money today. The explanation given by FM and the officers is unacceptable: @PChidambaram_IN
#SeedhiBaatPackageBakwas

Let the Govt point out any economist of repute who has said that liquidity measures are sufficient to stimulate demand side of economy. The Govt is living in an echo chamber, they listen to their own voices & opinions: @PChidambaram_IN
#SeedhiBaatPackageBakwas

We'll continue with the narrative that this fiscal package is only ₹ 1,86,000 crores. This is all that has been given for a country of 130 crore & not a single rupee by way of direct cash transfer to the poor families or migrant workers: @PChidambaram_IN
#SeedhiBaatPackageBakwas

I don’t think rating agencies run the country. Every country in the world is in distress, practically every country in Europe is facing a recession. If rating agencies downgrade us, they will have to downgrade every European country too: @PChidambaram_IN
#SeedhiBaatPackageBakwas

This is an unnecessary fear. We'll have to face that situation. As long as our foreign exchange reserves are high, inflation is under control, we are on the right path, demand grows & GDP picks up, why would a rating agency downgrade us?: @PChidambaram_IN
#SeedhiBaatPackageBakwas

This is an irrational fear. We should go ahead and do what we feel is right and tell the rating agencies that this is what our people need and this is what we’ll do: @PChidambaram_IN
#SeedhiBaatPackageBakwas

After Modi became PM, he said he'll continue MNREGA as it's a monument to Congress’ failure. Today the fallback position of Modi government is to add ₹ 40,000 crores to MNREGA: @PChidambaram_IN

#SeedhiBaatPackageBakwas

These words will come back to haunt them. What they had called a monumental failure of the Congress government, MNREGA, is now the safety net for the poor of this country: @PChidambaram_IN

#SeedhiBaatPackageBakwas

People will know where it hurts them, today it hurts them in the stomach, when they see their children starving, without milk & medicine. It hurts them when their pregnant wife cries while walking home, when there are no jobs in villages: @PChidambaram_IN
#SeedhiBaatPackageBakwas

You can’t fool all the people all the time. This fiscal stimulus package is inadequate: @PChidambaram_IN

#SeedhiBaatPackageBakwas

The govt is being opportunistic. They are just announcing what one person or one group of persons think is right without thinking through the consequences. Editorials & articles today point out downside of some of the announcements: @PChidambaram_IN
#SeedhiBaatPackageBakwas

Govt. is bypassing stakeholder consultation, legislation & discussion in Parliament & this will be resisted & challenged. If there’s a genuine reform that takes economy forward, we’ll support it but we'll have to read the fine print: @PChidambaram_IN

#SeedhiBaatPackageBakwas

12 मई को प्रधानमंत्री जी ने ₹20 लाख करोड़ के पैकेज की बात कही थी, तो हमें उम्मीद थी कि शायद उन्हें गरीबों और लाचारों का दुःख एवं चरमराती अर्थव्यवस्था समझ में आ गई है। मगर इन घोषणाओं में ऐसा कुछ नहीं था : श्रीमती @SupriyaShrinate
#SeedhiBaatPackageBakwas

जो खर्चा और आँकड़ा आया है, वो जुबानी जमा-खर्च है। इसमें सरकार के पास से बहुत कम खर्च होगा।
वित्त वर्ष 21 का खर्च बजट ₹30,42,230 करोड़ था। पिछले 5 दिन की घोषणाओं में इससे अतिरिक्त खर्चा मात्र ₹1.86 लाख करोड़ है: श्रीमती @SupriyaShrinate
#SeedhiBaatPackageBakwas

राजस्व को नुकसान:-
टैक्स छूट- ₹7500 करोड़
गरीब कल्याण पैकेज में कैश ट्रांसफर- ₹33,000 करोड़
अनाज वितरण की लागत- ₹60,000 करोड़
मेडिकल और हेल्थ- ₹15,000 करोड़
EPF कटौती- ₹6,750 करोड़
EPF सहयोग- ₹2800 करोड़
: श्रीमती @SupriyaShrinate
#SeedhiBaatPackageBakwas

प्रवासी मजदूरों को मुफ्त अनाज- ₹3500 करोड़
शिशु लोन सब्सिडी- ₹1500 करोड़
KCC अतिरिक्त क्रेडिट- ₹8000 करोड़
टॉप टू टोटल ऑपेरशन ग्रीन्स- ₹500 करोड़
: श्रीमती @SupriyaShrinate
#SeedhiBaatPackageBakwas

हर्बल कल्टीवेशन प्रमोशन- ₹4000 करोड़
वायबिलिटी गैप फंडिंग- ₹8100 करोड़
मनरेगा- ₹40,000
इनका कुल योग ₹1,86,650 करोड़ है: श्रीमती @SupriyaShrinate
#SeedhiBaatPackageBakwas

इस तरह जो अतिरिक्त खर्चा है, वो जीडीपी का मात्र 0.91% है। कहीं न कहीं सरकार ने लोगों के दुःख-दर्द की अनदेखी की है। इसमें निचले तबके के ₹13 करोड़ लोग बाहर हैं। इसमें किसान, प्रवासी मजदूरों, गरीबों के लिए कुछ नहीं है: श्रीमती @SupriyaShrinate
#SeedhiBaatPackageBakwas

हमें इस पैकेज से निराशा है और हम आग्रह करते हैं कि इसकी पुनः समीक्षा करके अर्थव्यवस्था को चुस्त-दुरुस्त करने वाला प्रोत्साहन पैकेज लाया जाए और लोन मेलों से बचा जाएगा: श्रीमती @SupriyaShrinate
#SeedhiBaatPackageBakwas

ग्रामीण क्षेत्रों में मनरेगा ही अब संजीवनी लग रही है, जिसका मोदी जी ने संसद में अशोभनीय भाषा में मजाक उड़ाया था। साथ ही, इस समय खाद्य सुरक्षा कानून की भी महत्वपूर्ण भूमिका है: श्रीमती @SupriyaShrinate
#SeedhiBaatPackageBakwas

We welcome expansion of MNREGA but what's the point if workers don’t get their 100 days of work. The benefit for migrant workers will be very limited. 7-8 days of work a month is certainly not enough for the migrant workers: @PChidambaram_IN
#SeedhiBaatPackageBakwas

When lockdown was announced on 4-hr notice they forgot about migrant labour who'd want to go home. It was a complete mismanagement, misjudgement & a monumental error. They should have ensured transport was available on a staggered basis: @PChidambaram_IN
#SeedhiBaatPackageBakwas

Govt. has made it abundantly clear to chambers, if not publicly then privately, that larger organised industries are getting nothing from this stimulus package. I have heard this from several industrialists: they don’t expect anything: @PChidambaram_IN
#SeedhiBaatPackageBakwas

Govt thinks organised industries will find its feet. Aviation cannot resume without help; automobile may limp back over months; tourism, hospitality, exports are dead. They need a sector specific package. Govt has completely ignored them:@PChidambaram_IN
#SeedhiBaatPackageBakwas

This is a hopelessly inadequate package. This is adding insult to the injury of the suffering people and we will press for the Parliament or at least the Parliamentary Committee to convene to discuss this package: @PChidambaram_IN
#SeedhiBaatPackageBakwas

How can they announce a bogus ₹ 20 lakh crore package and propagate this number without calling Parliamentary Committee which will scrutinise this number?: @PChidambaram_IN

#SeedhiBaatPackageBakwas

Govt is deliberately ignoring, sidelining Parliamentary institutions. Some silly rule is being cited by the Secretariat to say that confidentiality and secrecy will be compromised if a virtual meeting takes place to debate the package: @PChidambaram_IN
#SeedhiBaatPackageBakwas

I don’t think this Govt. is concerned about the poorest of the country. They are an elitist govt. They are a govt. guided by the privileged sections. This govt. is complacent and smug because the election is four years away: @PChidambaram_IN
#SeedhiBaatPackageBakwas

MNREGA is supposed to be need based, if there's demand, you have to provide the work. There should be at least 20 days of work on an average for every worker to survive, who wants work. This is the only safety net you have, use it: @PChidambaram_IN
#SeedhiBaatPackageBakwas

Financial transfer given to states is inadequate. FM admitted yesterday that dues for state's GST share has not been paid since December. What states are asking is over and above their entitlements- grants, aids & right to borrow: @PChidambaram_IN
#SeedhiBaatPackageBakwas