'Stimulus' only a bid to dazzle, won't help growth: Chidambaram
Senior Congress leader and former Finance Minister P. Chidambaram on Tuesday termed the stimulus measures announced by the Centre on Monday as just another attempt to "dazzle the people".
Citing the proverb "Khoda pahaad, nikla chuha (dug up a mountain to only find a mouse, or 'Much ado about nothing')", he said: "This is no stimulus package to push economic growth, it is another sly attempt to dazzle the people with exaggerated numbers and lead them to believe that the government is hands-on and responsive to the needs of the people and the economy."
Chidambaram noted that the IIP had contracted for the sixth month in a row and retail inflation surged to 7.34 per cent. "More worryingly, nearly all of the rise in CPI inflation was due to a steep rise in the prices of vegetables that has hurt the homemaker the most."
He also said that it is a candid confession that the earlier Rs 20 lakh crore package was a massive failure as it was a hoax.
"The numbers claimed this time too are a hoax. The stimulus is not of a value of Rs 73,000 crore. Nor is it of the value of Rs 1,00,000 crore, another number that has been thrown at us. The fiscal impact of these announcements is estimated by analysts to be a mere 0.1 per cent of GDP," he said.
Professing himself amazed by the use of the phrase "demand infusion", he wondered if such a phrase exists.
The Congress leader also charged the government with also trying to play the role of "mai-baap" (parental figure) when it tells government servants what amount and on what goods and when they should spend their own money.
"Just as the BJP has been telling people what to eat, what to wear, what language to speak, who to love, who to marry etc, it is now trying to control people on their spending preferences. This is another piece of retrograde interference in people's lives," he said.
The former Finance Minister also said that the Rs 10,000 crore interest-free festival advance to government servants is not additional expenditure, as it will be recovered in 10 monthly installments.
"It is like buying on equated monthly installments, that is EMI, and the Rs 12,000 crore offered to the states is not a grant but a loan. All the big states put together will get Rs 7,500 crore which is a minuscule fraction of the capital expenditure of Rs 9,00,000 crore budgeted by the states for 2020-21. It will make little difference," he said.
The offer of a tax concession to 35 lakh central government employees on LTC is a pathetic attempt to induce them to spend twice that amount out of their own money to gain a small benefit on tax, he added.
Chidambaram also said that Finance Minister Nirmala Sitharaman has also dis-incentivised encashing 10 days of leave by requiring that it must be spent as stipulated by the government in order to get the "paltry tax benefit".
The Congress leader alleged that the most deserving people who need money desperately have once gain been left in the cold. "They are the bottom half of the families in India. Government stubbornly refuses to make a cash transfer to their accounts as recommended by dozens of economists," he said. - IANS