Prime minister Narendra Modi and Finance minister Nirmala Sitharaman’s Aatmanirbhar package, announced earlier this month, is nothing short of a grand marketing stunt that many have already fallen prey to.
On the face of it, the economic relief package; worth Rs.20 lakh crores, or to put it in more pleasing statistics, 10% of India’s Gross Domestic Product (GDP), aims to boost economic growth and alleviate the distress faced by various sectors in wake of the COVID-19 pandemic.
However, a closer look into the breakdown of the five tranches - Economy, Infrastructure, System, Demography and Demand - tells a different story; about 47% of the stimulus is from already owed dues, RBI provisions and structural reforms, raising questions on the government’s so called “revolutionary move” to be self reliant coming across as a plea to gain approval from the masses.
Economists reckon the total expenditure by the government towards the five tranches to be a mere 1% of the GDP, which equates to roughly just over 2 lakh crores, including the Pradhan Mantri Garib Kalyan Package worth 1.7 lakh crores. This could be funded by expenditure cuts from other sectors, rendering the initiative’s status as a “relief package” useless. Furthermore, it leaves several sectors high and dry as instead of tangible benefits, the package burdens them with loans.
Whether the promised “10% of GDP” was a mathematical error in the Center’s calculations or a ploy to pacify those demanding measures to ensure financial and economic stability of the country is not clear, but one thing is; the Aatmanirbhar package is unlikely to contribute to relief, and instead have a devastating fallout in the long run as banks run out of funds. Although the announcement comes as a ray of hope to those in distress, it must be noted that the plans may fall through unless they are implemented properly.