Chidambaram attacks Centre: They've forgotten poorest classes completely; on way to forgetting middle class also

Former finance minister and senior Congress leader P Chidambaram on Wednesday said that apart from a couple of liquidity and regulatory measures, there is no fiscal support for the middle class in the announcement made by Finance Minister Nirmala Sitharaman.

"There is nothing in today's announcement for the middle class. I assume when you say middle class, you are referring to the tax-paying middle class as well as the non-tax paying middle class, which means people who have an income of about say Rs 2.5 lakhs to Rs 3 lakhs a year to about Rs 10 lakhs a year. Now for them, there is nothing," Chidambaram said.

"TDS has been reduced, but that's only a deferment of tax liability. It's a liquidity measure, it's not fiscal measure. The date of filing has been extended. That's a regulatory measure. So, apart from a couple of liquidity and regulatory measures, there is no fiscal support for the middle class," he added.

Chidambaram stated that he is "not surprised" by this.

"When the government is not willing to lend fiscal financial support to the poorest classes, including the migrant workers, how do you expect this government to provide fiscal financial support to the middle class? They have forgotten the poorest classes completely and they are on the way to forgetting the middle class also," he said.

On a question over fiscal deficit, Chidambaram said, "This is not a time to worry too much about the fiscal deficit. The additional borrowing that the government announced on May 8 will anyway take the fiscal deficit to about 5.3 or 5.4 per cent, assuming that the GDP remains constant. The GDP will decline and therefore the fiscal deficit will even go up. And if the fiscal deficit reaches a point where it becomes worrying for other reasons, the answer is to monetise part of the fiscal deficit."

Chidambaram also stated that the government is "refusing to acknowledge there is a huge humanitarian crisis, something which India has not seen since 1948."

"This is the biggest human and humanitarian crisis that India has faced. The government refuses to acknowledge it," he said.

Finance Minister Sitharaman today announced a series of liquidity measures for millions of small businesses reeling under the impact of COVID-19 lockdown, including collateral-free automatic loans worth Rs 3 lakh crore.

Borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover will be eligible. These loans will have a four-year tenure and have a moratorium for 12 months on principal payment.

There will be a 100 per cent credit guarantee cover to banks and non-banking finance companies on principal and interest. The scheme can be availed till October 31.

During his address to the nation on Tuesday, Prime Minister Narendra Modi had announced a stimulus package totalling Rs 20 lakh crore to rescue the economy reeling under the impact of coronavirus. This amounts to nearly 10 per cent of India's GDP.

(ANI)

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