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

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 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 is about 10 per cent of the GDP of the country. However financial institutions like HSBC, State Bank of India, Nomura, CLSA and Citibank suggest it is a mere 0.8 to 1.2 per cent of the GDP. The much awaited package is unlikely to assuage the deep wounds that the Indian economy has sustained due to the lockdown. The hawkers, factory workers, small traders, shopkeepers, marginal farmers, etc., of India will continue to wallow in poverty and desperation. —Rajendra Aneja, Mumbai, India