Travesty of stimulus
That barely 10% of the package was distributed among the States comes as no surprise as it was essentially flawed
Even the die-hard optimists were not enthused by the much-hyped Atmanirbhar Bharat Abhiyan package when it was unveiled by the NDA government in May, ostensibly to revive the economy ravaged by the coronavirus-induced lockdown. The latest revelation that barely 10% of the package was actually distributed among the States, that too in an arbitrary manner, should come as no surprise. This is because the so-called Rs 20-lakh-crore stimulus package was essentially flawed in its formulation and was actually ‘too little, too late’. In fact, it had managed to disappoint all sections of society in equal measure. Spread over five tranches, the package could not boost demand and enthuse markets but was seen as selling a distant dream at best and jugglery of figures at worst. The greater damage has been in the area of federalism as the Centre sought to run roughshod over the rights of the States. An RTI query by a Pune-based businessman on details of the State-wise and sector-wise disbursement of the package has now revealed that of Rs 3-lakh-crore sanctioned under the Emergency Credit Line Guarantee Scheme (ECLGS), as part of the package, only around Rs 1.20 lakh crore was distributed to the States as loans. Here too, the process for choosing the beneficiary States was unilateral and arbitrary. One wonders what happened to the remaining amount eight months after the funds were sanctioned. Maharashtra got the highest share in the loans with Rs 14,364 crore followed by Tamil Nadu with Rs 12,445 crore and Gujarat Rs 12,005 crore.
While the pandemic has caused immense suffering to the people across the country and crushed the economy, it is deplorable that the Centre has been insensitive to the needs of the people and concerns of the States. Over 6 crore small and medium enterprises have shut, resulting in more than 15 crore job losses. The stimulus package fell far short of the expectations on the demand side reforms, triggering an intense selloff in the domestic market. By linking the hike in borrowing limit to a set of conditionalities amounted to insulting the States and reducing them to the level of supplicants. Since the package had more to do with fixing supply-side issues and spoke about long-term reforms than catering to demand-side issues, it failed to give any boost to the economy in the short term and address immediate concerns of the economy. The focus should have been on credit expansion, debt restructuring and putting money directly into the hands of the poor and vulnerable. There is a strong case for stepping up expenditure on programmes that support the poorest sections who have suffered the most and on infrastructure projects.
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