COVID-19 package worth 1.6% of GDP or ₹ 3.22 lakh crore, not ₹20 lakh crore: Congress

The Congress on Sunday accused the government of misleading people in the name of an economic package and said the measures announced by the Centre amounted to only 1.6%of India’s GDP, i.e. worth ₹ 3.22 lakh crore instead of ₹ 20 lakh crore as claimed by the Prime Minister.

Congress spokesperson Anand Sharma said Prime Minister Narendra Modi must “walk the talk” and announce the measures required by giving money in the hands of the poor and small and medium enterprises to help reboot the economy.

He noted that there was a difference between providing stimulus to the economy and merely giving loans and credit to people.

Sharma, a former Union Minister, challenged the Union Finance Minister for a debate on the package while raising questions about the announcements made by the Prime Minister.

“The government’s economic package is only of ₹3.22 lakh crore and is only 1.6 per cent of India’s GDP and is not worth ₹20 lakh crore as announced by the Prime Minister,” Sharma said while addressing a press conference through video conferencing.

“I am questioning the Finance Minister, disputing the announcement of Prime Minister and challenging the government to disprove me on the numbers given by me and am ready for a debate with the finance minister,” he said.

Earlier, the Centre decided to allocate an additional ₹ 40,000 crore under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme.In the Union Budget 2020-21, the government had allocated Rs 61,500 crore for MGNREGA, and the ₹ 40,000 crore allocation will be over and above this budget estimate (BE), Union Finance Minister Nirmala Sitharaman said while speaking to the media here on Sunday. Ironically Prime Minister Narendra Modi had once called MGNREGA ‘a monument of UPA’s failure’. It seems that is what is coming to the rescue of his government again and again.

The decision comes as the Coronavirus pandemic spreads and the nationwide lockdown has wiped out livelihoods of several poor people, sending scores of migrant workers on long walks to their villages from the urban areas.

Though Sitharaman said that the additional allocation will help generate nearly 300 person days of employment, how much of that becomes reality remans to be seen.

Sitharaman also announced that no fresh insolvency case will be admitted for the next one year in view of the Coronavirus pandemic.The government had earlier suspended any fresh admission for six months.Further, she announced the government will also set up a special insolvency framework for MSMEs under Section 240 A of the Insolvency of Bankruptcy Code. This has been a long pending demand of the industry.The threshold for insolvency will also be raised to Rs one crore from the current ₹1 lakh which will be supportive for the MSME sector.Further, the debt occurring due to the Coronavirus pandemic will not be categorised as "default", Sitharaman said.The decision comes under the fifth and the final tranche of the Rs 20 lakh crore economic package announced by Prime Minister Narendra Modi last Tuesday.

At a time when the middle class and the working class were looking for relief and infusion of cash in hands, the government has thrown open the doors for Indian public companies to directly list their shares abroad and access a larger pool of capital. When low demand is the key problem, companies accessing more capital is unlikely to set the economy in order.

Union Finance Minister Nirmala Sitharaman on Sunday also said that 'PM eVIDYA' programme for multi-mode access to digital education will be launched immediately and that 100 universities will be permitted to start online courses by May 30.

While Sitharaman tried to explain the break-up of the ₹-20-lakh-crore figure, what can’t be denied is that most of it are loans and some of it already budgeted. The government is going to spend less than ₹ 70,000 crore in reality, a Barclays Bank study has showed, much less than the figure cited by even the Congress.