P Chidambaram flags inability of PM Garib Kalyan Yojana to boost demand & revive economy

On Wednesday, Congress Rajya Sabha MP P Chidambaram claimed that the PM Garib Kalyan Yojana offered only token relief to the people amid the coronavirus-induced lockdown. Union Finance Minister Nirmala Sitharaman had unveiled the PMGKY worth Rs.1.70 lakh crore on March 26 for providing free ration and cash payment to women, poor senior citizens, and farmers. He questioned the allocation of only Rs.1000 per person via the National Social Assistance Programme.

Moreover, he claimed that a female Jan Dhan account holder would have found it very difficult to manage the household on Rs.1,500 over a period of three months. He also alleged that it was not possible for a migrant and his family to sustain on 5 kg foodgrains per month. According to him, the money sanctioned under the PM Garib Kalyan Yojana could not act as a stimulus to boost demand and revive the economy.

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Chidambaram suggests measures to revive the economy

Amid India's GDP contracting by 23.9%, Chidambaram on September 6 suggested measures to stimulate demand and revive the economy. First, he urged the Centre to transfer some cash to the poorest 50% of the families. This has been the Congress Party's consistent demand to boost consumption. While the Union government has already extended the free ration scheme- Pradhan Mantri Garib Kalyan Anna Yojana till November, Chidambaram opined that food grains should be offered to all families irrespective of their economic status.

He said that the Centre should start massive public works and increase spending on infrastructure projects. He added that the huge food grain stock could be used to pay wages in kind to the workers. Furthermore, he called upon the NDA government to recapitalize banks enabling them to lend more. The Rajya Sabha MP insisted that the states should be paid their GST compensation dues. 

While acknowledging that his recommendations will require a lot of money, Chidambaram advised the Centre to borrow liberally. For instance, he pointed out that the Fiscal Responsibility and Budget Management norms could be temporarily relaxed. Additionally, he requested the government to accelerate disinvestment. The senior Congress leader contended that money could be raised by borrowing from the International Monetary Fund, World Bank and Asian Development Bank. He mentioned that monetising part of the deficit was another option that the Centre could consider. 

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