The government borrows more to help stimulate demand and
revive the country’s economy, suggested by former Union finance minister P
Chidambaram on last Sunday. Some measures to raise money which includes
relaxing FRBM norms, accelerating disinvestment and borrowing money from global
banks.
According to him, the measures to revive the
economy, he sought transferring cash to the poorest 50 per cent of families,
offering them food grains and increasing spending on infrastructure, other than
paying arrears of GST
compensation to different states.
He added on twitter that, there are some concrete steps to stimulate demand or consumption and revive the economy: Transfer some cash to the poorest 50 per cent of families. They give food grain to all families, those who need will take it. That will raise the spending on infrastructure projects. By use of food grain stock to pay wages in kind and start massive public works. The banks are recapitalizing to enable them to lend and pay the arrears of GST compensation to the States.
India’s GDP shrinks to 23.9 per cent in the April-June quarter of the financial year and all major sectors, except agriculture, showed a major decline in their performance. In the situation, the government has also acknowledged the fact that the unprecedented contraction in India’s Gross Domestic Product (GDP) growth is higher than its peers, attributing the economic crisis to strict lockdown that India enforced in the April-June quarter. As per the new Economic Review report, the finance ministry said that, that agriculture has led the economic revival in the country, with industrial production showing signs of recovery with eight core industries picking up pace in July.
He suggested that all of the above will need money so Borrow and don’t hesitate. There are some concrete steps to raise money, in order to relax the FRBM norm and borrow more this year and accelerate disinvestment. He added that use the offer of USD 6.5 billion by IMF, WB, ADB etc. As a last resort, monetize part of the deficit. Chidambaram has been urging the government to take appropriate measures to revive the economy and has called upon it to provide GST compensation to states, as promised to them at the time of GST implementation.
