Senior Congress leader M Veerappa Moily on Saturday said the government's economic relief was like "peanuts" when compared with the economic devastation in the country and asserted that it should have offered packages amounting to at least 9 per cent of the GDP to help the people amid the COVID-19 pandemic.
Moily's attack on the government came a day after RBI Governor Shaktikanta Das announced a string of relief measures for the stressed banking and financial sector.
"The RBI governor's second package announced is no doubt a welcome move. In the first package both the government and the RBI provided a package which was less than 1% of GDP. In the second package, the financial package is just about 0.7% of GDP," the former Union minister said in a statement.
"The conditions in India are harsher than any other country. The government should understand the gravity of the present situation and the multiple dimensions of the present crisis," he said.
Moily claimed that Prime Minister Narendra Modi and the government have "underestimated" the damage caused to the economy and also the suffering of the people.
"There is a big loss of jobs to the extent of 35 to 40 million. There is a direct loss of Rs 15 lakh crore due to the present lockdown. According to Nomura, it is estimated to be 7.7% of GDP," he said.
The collection of GST is down by 40 per cent and the state governments which took the mantle of handling the present crisis including the issue of migrant labourers are left to fend for themselves, he claimed.
"The government should have ensured at least a package of 9% of GDP which works to Rs 17.5 lakh crore. What the government and RBI has done is only peanuts which will not allow the economy to stabilise forget about taking-off," Moily said.
The RBI provided the second package to ease the liquidity, but it forgets that the recent merger of banks has demoralised the staff and officials and the banking machinery appears to have collapsed.
"State governments are not in a position to run normal budgetary programmes, forget about meeting the present war-like situation. The rural economy/agriculture has been totally paralysed," he said, adding that the state governments are not in a position to provide for any rescue operations.
"The country's economy has been put in a disastrous situation and hunger is haunting 60 per cent of the country's populace," he said.
The two packages announced reflect "lack of both seriousness and sensitiveness" of the government towards the plight of the people in the country.
The government should also think of taking appropriate measures of tax exemptions for companies, relax regulations and also give up over regulation in the development sectors to ensure that the economy is put back on track, he asserted.
Moily also suggested mobilizing funds and restructuring of loans to help needy companies and SMEs.
The RBI on Friday further eased bad-loan rules, froze dividend payment by lenders and pushed banks to lend more by cutting the reverse repo rate by 25 basis points, as it unveiled a second set of measures to support the economy hit hard by a coronavirus-led slowdown.
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