‘Bluntly tell government to do its duty’: Chidambaram advises RBI governor

‘Bluntly tell government to do its duty’: Chidambaram advises RBI governor

Congress leader P Chidambaram on Saturday advised Reserve Bank of India governor Shaktikanta Das to “bluntly tell the government to do its duty (and) take fiscal measures” to firepower the national economy struggling due to coronavirus and the resultant lockdown imposed to combat its spread.

“Governor @DasShaktikanta says demand has collapsed, growth in 2020-21 headed toward negative territory. Why is he then infusing more liquidity? He should bluntly tell the government ‘Do your duty, take fiscal measures’,” tweeted the Congress leader.

On Friday, Das admitted that growth will be in “negative territory” this year, the first time anyone in the government or the central bank has admitted that India’s gross domestic product (GDP) will shrink this year.

Chidambaram said the “RSS should be ashamed of how the government has dragged the economy into negative growth territory”.

The governor cut the policy rate by 40 basis points to 4.0% yesterday, acknowledging the adverse impact on the Indian economy of the coronavirus disease.

Das announced the cut, and other measures aimed at keeping “financial markets working, ensuring access to funds to everyone, and preserving financial stability”.

Chidambaram, who has also been a former finance minister, hit out at PM Narendra Modi and FM Nirmala Sitharaman for the Rs 20 lakh crore relief package that has “fiscal stimulus of less than 1% of GDP”.

The PM had claimed that the relief package was worth 10 percent of the GDP.

“Even after RBI’s statement, is the @PMOIndia or @nsitharaman lauding themselves for a package that has fiscal stimulus of less than 1% of GDP?,” said Chidambaram in another tweet.

Yesterday, Sonia Gandhi, while addressing a meeting of 22 like-minded parties, also described PM Modi’s May 12 announcement of the Rs 20 lakh crore stimulus package as a “cruel joke” on the country.
“This package is about 10 percent of India’s GDP. With this various sections of the country and those linked to economic system will get support and strength of 20 lakh crore rupees. This package will give a new impetus to the development journey of the country in 2020 and a new direction to the Self-reliant India campaign,” said the PM while announcing the package.