Stimulus Package To Have Multiplier Effect: FM on No Direct Grants

FM agreed that she doesn’t object to the idea of higher case transfers, however, she asked “Grants for how many?”

3 min read
Finance Minister Nirmala Sitharaman on Sunday, 17 May announced the last tranche of the economic package under the Atmanirbhar Bharat Abhiyan.

Days after announcing five trenches of the 20 lakh crore economic package under 'Atmanirbhar Bharat Abhiyan', FM Nirmala Sitharaman on Wednesday, 20 May in various interviews to media outlets and wires spoke about why the government did not offer immediate relief in the form of direct cash grants.

Sitharaman and the ruling party have been facing flak from the various opposition parties which have claimed that the package doesn't provide immediate relief to poor farmers and labourers and stands inadequate.

Speaking to ANI's Smita Prakash, FM said, "It was important to give a stimulus for businesses to start off. In the PM Garib Kalyan scheme - introduced after lockdown, we gave some cash transfer. With that done, we weren't closing the option."

“For the cash transfer, we thought it was far more effective because the way in which we’ve planned it, we thought there’ll be greater multiplier effect and therefore it should be through banks, businesses, through money given for working capital.”
Nirmala Sitharaman, Finance Minister

To Indian Express, she agreed that she doesn't object to the idea of higher case transfers, however, she asked "Grants for how many?"

"It is aimed at giving some money to meet the fixed cost, it is aimed at giving some money to make sure that some payment for the wages are made. So that’s what we have done. I have made sure that banks will extend the loan. Yes, it’s a loan, it’s a credit. Yes, it’s not a grant. But that’s where I am asking, grants for how many, of how much?" she said.

'Not Excluded Any of the MSMEs'

On the question of excluding sectors such as aviation, tourism and hospitality, FM Sitharaman said, "I have not excluded any of the MSMEs and we have also widened the definition. So when I go back to talking about this, is that sector-specific, no."

She maintained that all MSMEs will be beneficial but more loans could be risky. "Will I be held responsible for the loss of money," she asked.

She said she is asking the banks not to ask for additional collateral.

'Can't Make Assumption About What's Enough'

As many ask the government if the additional Rs 40,000 crore in MGNREGA is enough while the migrant workers struggle to find safe shelter, FM told Indian Express, "What is going to be enough, even if I know, let’s not simplify the complexity of the problem… because the displacement and the type of displacement and the notional cost of it, the uncertainty it will lead to about how, and if at all, will they come back."

She added, "And if they don’t come back, they are there - a place from where they chose to come to the city for jobs - what are the options available? Therefore, the kind of uncertainty this itself has created, is something you can’t gauge."

FM Attacks Congress

FM lashed out at Congress and said to ANI, "...If our official press conferences telling what package government wants to give is called drama, stopping migrants, you go, sit and have a 'gupshup'! Don't I have right to comment on it?"

Earlier, Rahul Gandhi had met migrant workers on the road, following which Sitharaman had called his move, "dramabaji".

On migrants issue, she said, "We thought of giving them cooking gas and some amount to run the house. I would ask opposition, have those state government, where they're in power, handled this matter any better? Wouldn't the attention be towards those government where their party/alliance partners are in power?"

Commenting on the tug of war between Congress and the UP government over buses for migrants, Sitharaman lashed out at Priyanka Gandhi Vandra.

“If she (Priyanaka Gandhi Vadra) is really focussed about UP government, she should see why 300 trains arrived in UP, when not even 5-7 arrived in Chhattisgarh. Don’t want to politicise this as migrants are Indians and all of us in this extraordinary situation should concentrate and work together.”
Nirmala Sitharaman, Finance Minister

(With inputs from ANI & Indian Express)

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