Government prisoner of own ignorance: P Chidambaram

Congress on Wednesday expressed disappointment over the first tranche of the Rs 20 lakh crore financial package announced by Finance Minister Nirmala Sithraman and slammed her for not willing to spend more to re-emerge from the COVID-19-induced economic slowdown.

“The government must spend more, borrow more, and allow states to borrow more. But it is not willing to do so. This government is a prisoner of its own ignorance and fears,” senior Congress leader P Chidambaram told reporters through a video link hours after Sitharaman spelt out the details of the financial package.

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“Except for the modest MSME package, we are disappointed with announcements,” the former Finance Minister said.

Congress had pitched for cash transfers to the bottom 50% of the population to spur domestic spending to create demand and re-start the economic cycle.

“There is nothing in the Finance Minister's announcement for the lakhs of poor, hungry and devastated migrant workers. It''s a cruel blow to those who toil for living every day,” Chidambaram said.

Chidambaram said even the measures for MSMEs were skewed in favour of large units. “The bulk of the 6.3 crore MSMEs has been left high and dry. We welcome the offer of subordinate debt and equity corpus funds. But we will await their terms and conditions. The devil is in the detail,” the Congress leader said.

He said in case of the credit guarantee fund, not the entire fund would be spent.

“The expenditure will be limited to the extent of NPAs in the outstanding guarantee credit to MSMEs. Assuming an NPA level of 20-50 per cent, the actual expenditure over the loan period (which may be years) will be a maximum of Rs 3,00,000 crore,” Chidambaram said.