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India's stimulus package seems huge but is short on substance

Rajendra Aneja
Filed on May 23, 2020

The stimulus package announced by India's finance minister Nirmala Sitharaman over the last five days has not inspired industrialists or businessmen. The stimulus is principally in the form of loans to farmers and small businesses. It does not offer any immediate succour to the groups adversely impacted by the protracted lockdown. There is no relief to the millions of migrant workers, who have lost their jobs and are struggling to get to their homes. The salaried segment could have been given some tax concessions in a dreadful year, in which many will lose jobs. We have a situation where a patient is on the operating table needing blood urgently to survive, but the doctors are busy writing the prescription of medicines to be taken post the surgery. We have to, first, save the patient.

The government had said that the stimulus of Rs20 trillion was about 10 per cent of the GDP of the country. However financial institutions like HSBC, State Bank of India, Nomura, CLSA and Citibank have opined that the cost of the package is a mere 0.8 to 1.2 per cent of the GDP of India. So, the much awaited stimulus package will not assuage the deep wounds that the Indian economy has sustained due to the lockdown and the cessation of economic activities. The hawkers, factory workers, small traders, shopkeepers, marginal famers, etc., of India will continue to wallow in poverty and desperation.

Rajendra Aneja, Mumbai, India

 


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