By K Raveendran
South Indian superstar Rajinikanth is known for his punch dialogues. His fiery one-liner “When I say something once, it is like saying it a hundred times” in his chart-buster Baasha movie has almost become part of regional folklore. But even Rajnikanth cannot beat Prime Minister Narendra Modi, whose oratorical skills can move many times more masses than the South Indian superstar can ever hope to do. If Modi has one thing to say, he can make a hundred things out of it.
So when Modi announced his Atmanirbhar Bharat Abhiyan stimulus package of Rs 20 lakh crores, saying the details will be announced by Nirmala Sitharaman, it meant that he did not have anything to say, which became clear when the finance minister enacted her laborious act, spread over a number of days.
If Modi is predictable, Nirmala Sitharaman is a hundred times more so. As such, when the finance minister started her opening presser with her elaborate version of ‘the story so far’, it was obvious that she too had very little in terms of newness. Her obsession with the past, of which the country has had several mouthfuls, particularly when it came to the UPA rule, is passe.
Her economic harangue sounded like a budget speech, which of late has been reduced to an anthology of writings and sayings dug out from literary dustbins. The subsequent ‘announcements’ over the next few days were no exception. She has quickly prepared a Covid edition of her own budget, which by itself had nothing much to write home about.
Despite all that people say about her calibre, Nirmala Sitharaman is a smart lady. She knew very well that she would be walking into a treacherous area if she got into the specifics. So she went round and round, avoiding the details so that she could give the slip to her interrogators. In the end, she reduced the task to merely accounting for Rs 20 lakh crore, although she started wrong-footed by mentioning it as Rs 20 lakh in a totally unnecessary tweet.
For instance, she announced Rs 3 lakh crore for providing automatic loan to micro, small and medium enterprises (MSME) to handhold these units out of their lockdown woes. But she did not say how much each unit can hope to get. Given that there are 45 lakh MSME units in the country, this would work out to just about Rs 6 lakh per unit. It is easy to imagine what this amount can do to a micro unit, which by the new definition involves an investment of Rs crore and a turnover of Rs 5 crore.
According to the new definition, a small unit involves an investment of Rs 10 crore and turnover of Rs 50 crore, while a medium unit is defined as one with an investment of Rs 20 crore and turnover of Rs 100 crore. She was smart enough to understand what impression a mention of per unit allocation would have created, compared to what is conveyed by an allocation of Rs 3 lakh crore.
This is true of all her announcements and indicates an issue with the approach. In fact, the thrust of her announcements seems to be to create favourable public opinion rather than address the real issues at hand and find solutions to the problems on the ground. The government has put the ball in the court of the banks, which are supposed to infuse the cash into the system, irrespective of their already severe financial health.
While the need for the Modi government was to think out of the box and come up with an appropriate stimulus response that would put money in the hands of people and revive demand in the economy, it is not even boxed thinking that the government has displayed. The stimulus has been drawn up with no thinking at all.
Congress leader Jairam Ramesh hit the nail on the head when he asked in a tweet: “Madam Finance Minister, One simple question. What is the ADDITIONAL cash you are putting into the system over the next 6 months? The announcements you made today are mostly contained in your budget presented on Feb 1. Another case of repackaging and remarketing.”
Another typical response came from Congress spokesperson Randeep Surjewala, who described the Modi government’s Rs 20 lakh crore package as nothing short of a ‘jumla’ and described it as another instance of ‘voodoo economics’ followed by the Prime Minister and the finance minister. (IPA Service)