Modi’s yesterday’s announcement of a mammoth package of 20-lakh crores of rupees shot a bold headline, yet it seems to be a hoax at the first sight. There is also no address to the woes of the migrant workers either which reasserts a sight of complete apathy. The talk of ‘labor’ (one of the four Ls) in the package means more pro-industrialists labor reforms thereby indicating and promising much more loads of anti-workers legislations once the announcements of this package unfold on the ground.
So far as addressing the heart-rending mammoth human tragedy that has fallen on the migrant workers, there is absolutely no mention of relief, not even any instant relief, in the package. We have already seen how they have been humiliated throughout the lockdown periods during their ‘penniless stay’ in their herded rooms in the cities waiting to die of hunger or during their long, long journey on foot back home. Now a further crackdown and punishment is being mooted on those migrant workers who refuse to join their work, while all the legal protective covers for them are being disapproved and removed in the name of battling Covid-19. In this backdrop, the ‘Atmanirbhar Bharat Abhiyan’ (Campaign for Self-Reliant India) is going to be too big a burden to the migrant workers as they will be sought to shed their last drop of blood for making it a success by being ready to bear the brunt of the new levels of vigorous exploitation of their labor as well as labor power.
On the other hand, the ₹20 lakh crore package as announced by the prime minister sounds big but when its actual figures are split, we find that “it will burn only a small whole in government finances, as ₹8.04 lakh crores from it is an additional liquidity injected into the system by RBI through various measures in February, March and April.” The package also includes the ₹1.7-lakh crores of the fiscal package announced on March 27 by the Finance Minister. This sends the balance of the economic package to ₹10.26 lakh crores only.
Sources from within the government said that the fiscal outgo may not be more than ₹4.2 lakh crores during the year 2020-21, whose cues may be taken from revised borrowing calendar announced just three days back. It says “on May 9, the government revised its estimated market borrowing to ₹12 lakh crore from ₹7.8 lakh crores as announced in 2020-21 budget… In a way that puts a ceiling to the size of a fiscal package at 2.1 % of GDP” or ₹4.2 lakh crores.
According to an earlier Financial Express report dated 2nd May, 2020 also, it was noted that ‘the Government is likely to cap its overall spending on Covid-19 related relief at around ₹4.5 lakh crore’, around $60 billion, due to concerns that excess spending could trigger a sovereign rating downgrade, two senior government officials said. “We have to be cautious as downgrade have started happening for some countries and rating agencies treat developed nations and emerging markets very differently.” the first official told Reuters.
A Government official on the condition of anonymity, as per 13th May 2020 Indian Express, said that ‘the government cannot really afford a huge stimulus.’ He further said, ‘it is intended to just provide relief and get the patient out of the ICU… There is no fiscal space to increase expenditure substantially.’
Having these things in the hindsight, what would be the actual size of the package announced yesterday by the Prime Minister Modi is matter of concern for those who are not blinded by the glaze of Corporate or Godi media’s trail of praise of this package.
Its cues can also be taken from the actual state of affairs governing the 27th March announcement of a package of ₹1.7 lakh crores in which money transfers immediately effected would add up to just only ₹61,380 crores over the next three months. To Women Jan Dhan Account holders – ₹10,000 crores. To widows, elders and the disabled – ₹3,000 Crores. To farmers – ₹17,380 crore, and The Building And Construction Workers Welfare Fund – ₹31,000 crores. Beyond this, the ₹17,380 crores to be released to farmers was not an additional aid. It was already budgeted for in 2020-21. ‘The government was only front loading the payment of the first tranche of ₹2,000 (of the budgeted ₹6,000 per farmer a year under the PM KISAN scheme).’ Similarly, ‘the money for construction workers did not require the government to borrow extra.’
This is enough to call out the hoax that the ‘huge’ economic package of ‘₹20 lakh crore’ actually is.
(An overall comment will be given in the next issue)
Originally published in Scientific Socialism: PRC’s Theoretical & Political Weekly Commentary on Current Issues (Issue 2/ 7-14 May ’20)
To read a complete analysis of the 20 lakh crore stimulus package, visit https://sarwahara.com/2020/07/23/%e0%a4%86%e0%a4%a4%e0%a5%8d%e0%a4%ae%e0%a4%a8%e0%a4%bf%e0%a4%b0%e0%a5%8d%e0%a4%ad%e0%a4%b0-%e0%a4%ad%e0%a4%be%e0%a4%b0%e0%a4%a4-%e0%a4%95%e0%a5%87-%e0%a4%b2%e0%a4%bf%e0%a4%8f-20/