SITHARAMAN’S MASTERCLASS IN BEATING ABOUT THE BUSH
By K Raveendran
Nobody can beat Finance Minister Nirmala Sitharaman in beating about the bush. Her press conference on Monday to announce major concessions to people and businesses in view of the Covid virus outbreak in the country was a classic flip-flop.
Even before the actual press conference started, she had tweeted that the government was working on an economic package on priority “to help us through the Corona lockdown” that has impacted economic activity in the country, but it would take a bit more time to be finalised.
That was a lot more ‘specific’ than what she actually said at the press conference. “Work is going on and we are very close to coming out with an economic package, which will be announced sooner rather than later,” she said. The government and the regulators are constantly monitoring the situation.
That was typical of her approach to the pre-Covid economic slowdown, which she has refused to accept as a fact. So, when Prime Minister Narendra Modi announced in his address to the nation while calling for a 24-hour ‘janata curfew’ that a task force under the leadership of the finance minister will work out an economic package, it was more or less clear as to where that initiative was headed.
When asked about the status of the task force at the press conference, Nirmala Sitharaman was even more evasive. “The work of the task force which is multi-layered is already almost nearing a conclusion. So the task force and the task force based report and the action following the task force’s report are almost at its peak and that is why I have said we will announce the economic package sooner rather than later,” she clarified, if it can be called clarification by any stretch of imagination.
According to her, a lot of ideas are being generated. But reports say the task force is yet to be constituted. The finance ministry says the PM’s Office or the Cabinet Secretariat would be responsible for issuing an order to create it. This explains Nirmala Sitharaman’s studied ambiguity.
In any case, she made a big deal of her announcements. Her economic package, however, did not have anything that could provide relief for millions of informal sector and daily wage workers who have been hit the shutdown. She is talking about certain ATM charges being waved, but is mum on how the affected millions will have money in their bank accounts when they have lost their livelihood.
The Prime Minister in his announcement declaring the 28-day national lockdown was also circumspect about the relief package required to deal with the economic impact of the unprecedented situation, which could be even bigger than the ill-conceived demonetisation that the country’s economy is yet to recover from. The announcement of Rs 15,000 crore plan to fight the deadly infection is, of course, welcome, but this money would be spent on creating the infrastructure to deal with the outbreak and not is devastating economic impact.
Contrast this to what countries such as Germany and the US, now considered the next global hub of Covid-19 outbreak, are doing to provide economic safety net to their citizens. Germany has pledged ‘everything it has’ to device packages to cushion against the impact of the coronavirus, estimated to total one trillion euros.
The German measures, expected to kick off in the next few days, include unemployment payments to all those who have lost their jobs, in addition to one-off liquidity payments for small companies worth 50 billion euros. According to reports, payments of €9,000 and €15,000 will be available for companies with up to five and 10 employees respectively.
In the largest stimulus plan in history, the US is reportedly close to a $2 trillion package to rush aid to businesses and workers facing ruin from the coronavirus pandemic. According to reports, the package provides for direct payments to most Americans and expanded unemployment benefits, corresponding to a one-time payment of $1,200 per person, or $3,000 for a family of four.
Reports say there will be a $367 billion program for small businesses to keep making payroll while workers are forced to stay home. Another fund worth $500 billion is to be used to provide guaranteed, subsidized loans to larger industries.
Indians are much worse-off when it comes to the economic impact of the virus attack, which has robbed crores of people in the unorganised sector of their livelihood, putting their families at the risk of starvation deaths. Any meaningful economic package to deal with the coronavirus outbreak should, therefore, include direct payment of cash to India’s poor so that they can remain confined to their homes and survive until such time that they can venture out again in search of whatever employment they have been engaged in. (IPA Service)