Another Stimulus Package Announced: No Significant Increase in Expenditures
CPI(M) Polit Bureau has issued the following statement on November 13
YET another ‘stimulus’ package has been announced by the central government without any significant hikes in government expenditures or direct cash transfers to the people.
The central government boasts of a total of 15 per cent GDP constituting the stimulus, combined with the earlier three announcements. The reality is that the sum total of direct extra governmental expenditures is, by liberal estimates, Rs 3,72,295 crores or a mere 1.9 per cent of the GDP. This is a measly stimulus compared to other major economies in the world who have provided 10 to 15 per cent of their GDP.
Even these announcements of increases in governmental expenditures are allocations. They can be offset by reductions under other heads of the budget, thereby reducing even this liberal estimate of 1.9 per cent of GDP. The finance minister must tell the country what is the amount being spent by the government over and above the budgetary estimates of expenditures, only then the real picture will emerge.
Coming a day after the RBI’s severe indictment that the Indian economy is in a deep recession for the first time in history, this announcement fails to constitute a blueprint for economic revival.
Rest of the announced package, as the previous three, is for credit facilitation hoping that this will increase investments generating jobs and reviving the economy. But this can never happen as what is produced by such investments needs to be sold and the Indian market is shrinking as people have less and less purchasing power.
The economy can only be revived through a massive hike in public investments to build our much-needed infrastructure; generate jobs and boost domestic demand.
The government’s stimulus packages meet the needs of foreign and domestic capital to maximise profits but cannot revive the economy.
People’s miseries will continue to mount further with escalating unemployment, hunger and price rise leading to growing poverty and depravation.
The Polit Bureau of the CPI(M) reiterates that direct cash transfers and distribution of free food is immediately required both on humanitarian grounds and to give purchasing power to the people. This is the only way demand in the economy can rise leading to the beginning of any economic revival.