By Gyan Pathak
Prime Minister Narendra Modi’s Atmanirbhar Bharat Abhiyan has a clear message for a self-reliant India. “What an idea!” exclaimed all, in their initial ecstatic reaction, which later gave way to a great disgust, fear, and frustration. The announcement of PM Modi’s economic stimulus package of Rs 20 lakh crore under this umbrella movement announced on May 12 turned out to be Rs 20.97 lakh crore made known to the public in five tranches by Finance Minister Nirmala Sitharaman, ultimately proved to be a great deception. Economic analysts are unanimous on this point that the real fiscal cost of this seemingly big package is less than Rs 2 lakh crore, i.e., only one per cent of the GDP as against 10 per cent originally claimed.
It gives a twist to the meaning of ‘self-reliant’. The term originally denotes a state of being someone who is reliant on his own strength. The term creates a happy illusion and day-dreaming. Since the whole world is interdependent, everyone wishes to be free from the dependence on others. It’s unrealizable. It’s a fantasy. Interdependency demands cooperation and love among people to live happily together. If love is lost between man and man, the government and the citizens, as we have seen during lockdown and its aftermath, a man is bound to fall back to rely on his own strength, rather on the incapable, corrupt, and insensitive government machinery and people. For the people of India, it is clear message from, non less the Prime Minister, be ‘self-reliant’, indirectly, don’t rely on the government, rely on your own efforts. It is an expression of the reality rooted deep in the unconscious self of the speaker. It is the megalomania manifested in the term ‘self-reliant India’ only to hide the ugly face of the failure of the lockdown creating immeasurable human sufferings.
The whole package amounting to about Rs 21 lakh crore is of little immediate help, because it is not intended as a response to immediate crisis resolution. The focus is on economic reforms that the government has been trying to push for a long time, but was unable to do so because of the stiff resistance from the people of India. It is unethical, mean, and opportunistic psyche of our leadership, which have come into play in the time of a great public health and economic crisis. They have come out with economic reforms measures to be implemented in the medium and long term, while the people are under the grinding hardship on account of the disease and pennilessness. The working class has been subjected to injustice, little help was provided to them during the lockdown, resulting in loss of hundreds of life. In the aftermath of lockdown, labour laws are being done away with. The government has targeted the land of the people, particularly farmers, to be handed over to business and industries in one or the other pretext.
Most of the amount of the package is provided in terms of loans, liquidity, collateral, incentives to business and industries, deferred payments of loans, EMIs, taxes, EPF contribution etc. Even the people who are in job will get several benefits. However, for the 150 million persons who have lost their jobs, will be getting almost nothing. The 800 million people who are facing near starvation situations, including the handicapped, children, women, old people, sick, etc are being provided a little.
Millions of workmen have already left the places where they were working with business and industries. Only a handful of them are still there, and they are planning to leave the places for their villages. In such a situation, the package is providing loan to business and industries, retailers and vendors, builders and construction companies. The country is still under lockdown with only a few relaxations. Consumption and demand for almost all things, except the essential goods and services, have been collapsed. In such a situation no labour intensive industry could restart. Though the government and the RBI have announced several incentives for them but they had little use for loans in the present scenario. One can give an example of earlier RBI package of Rs 5.2 lakh crore for the purpose which failed to attract business and industries. Banks failed to push that amount in the market as loan. The result was disheartening. Banks have to park this amount in RBI. The money went nowhere.
Finance Minister Nirmala Sitharaman had a meeting with banks on May 22 to assess the ground realities and to know if our banking system is ready to implement the provisions of the package. It was important because all the welfare measures as well as loans and incentives are to be redirected through banks, particularly, public sector banks. When banks’ unwillingness and hesitation on providing loans, even on government guarantee, came to the fore, Ms Sitharaman had to assure the officials that no action will be taken against them on their commercial decisions gone wrong. As we know our country, and the corruption in the recent banking crisis and frauds, the assurance in itself is indicative of the future corruption inbuilt in the whole package.
It was revealed in the meeting that loans worth over Rs 6.68 lakh crore were sanctioned by Public Sector Banks during March 1 to May 19 to 59.79 lakh accounts from MSME, retail, agriculture, and corporate sector, most of which are waiting to be availed by customers, apart from the amount being too little. Even out of Rs 1.07 lakh crore emergency credit lines and working capital enhancements, only Rs 25,000 crore were availed by customers during March 20 to May 19. One can see how quick the loans can be actually disbursed to the needy. One of the major hurdles in the way will be as usual, cumbersome process, formats, documentation, corruption, and red-tape. Moreover, high interest rate on loans will act as deterrent. For example, Under the Emergency Credit Line Guarantee Scheme (ECLGS) worth Rs 3 lakh crore for MSMEs, interest rates are capped at 9.25 per cent for banks and financial institutions, and at 14 per cent for NBFCs, at a time when consumption and demand are negligible.
It means flow of liquidity to small vendors, MSMEs, corporate, farmers and so on, will remain a key challenge in implementing the relief measures. Welfare measures like Pradhan Mantri Garib Kalyan Yojna include several other welfare schemes is worth a paltry Rs 1.7 lakh crore, which included Rs 500 per month cash to 200 million women Jan-Dhan account holders for only three months, an ex-gratia of Rs 1,000 to 30 million poor senior citizens, widows, and handicapped. PMGKY is also front-loaded the Rs 2000 installment paid to 87 million farmers under PM-Kisan. Apart from its being too little, these welfare schemes would not cover the entire lower middle class who have entered into abject poverty during lockdown. Situation will thus remain precarious due to lack of measures urgently needed while focusing on medium and long term targets. (IPA Service)