Govt's $6.64Bn Economic Stimulus a Sly Attempt to Dazzle People, India's Ex-Finance Minister Says

Finance Minister Nirmala Sitharaman on Monday announced a stimulus package which included a 50-year interest-free loan to state governments, capital expenditure on infrastructure and a festive advance to government employees.

India’s former Finance Minister and senior Congress party leader Palaniappan Chidambaram on Tuesday slammed the $6.64 billion stimulus package unveiled by the country's Finance Minister Nirmala Sitharaman a day ago.

He called the move a "sly attempt to dazzle people". 

Addressing the media virtually, Chidambaram said, "The grand announcement yesterday was no stimulus package to push economic growth. It was another sly attempt to dazzle the people with exaggerated numbers and lead them to believe that the Government is hands-on and responsive to the needs of the people and the economy."

Chidambaram said the interest-free festival advance to civil servants is not extra spending and it will be recovered in 10 monthly instalments. 

On a $1.64 billion interest-free loan to state governments announced as a part of the package, Chidambaram said that it was "a minuscule component of the total capital expenditure of $123 billion" planned by the state governments in the present year of 2020-2021. 

The first economic stimulus of $266 million was rolled out on 12 May by Prime Minister Narendra Modi in an attempt to pull the economy out of Covid-related economic decline. The Indian economy contracted by 23.9 percent between April and June this year as an result of the pandemic.