New Delhi [India], June 29 (ANI): A day after Finance Minister Nirmala Sitharaman announced a package to support the pandemic-hit economy, senior Congress leader P Chidambaram on Tuesday said the answer to this crisis is to put money in the hands of the people, especially the poor and lower-middle classes.
In a series of tweets, the former finance minister said "'Some elementary truths: Credit guarantee is not credit. Credit is more debt. No banker will lend to a debt-ridden business. Debt-burdened or cash-starved businesses do not want more credit, they need non-credit capital.
'More supply does not mean more demand (consumption). On the contrary, more demand (consumption) will trigger more supply,' he said.
Demand (consumption) will not grow in an economy where jobs have been lost and incomes or wages have been reduced, Chidambaram argued.
'The answer to this crisis is to put money in the hands of the people, especially the poor and lower-middle classes," he said.
Union Finance Minister Nirmala Sitharman on Monday announced several economic measures to revive the economy amid the COVID-19 pandemic.
With a focus on health and medical infrastructure, the Finance Ministry on Monday announced a Rs 1.1 lakh crore loan guarantee scheme for COVID-19-hit sectors. Out of the Rs 1.1 lakh crore, the health care sector will get Rs 50,000 crore, while the others will get Rs 60,000 crore.
Additionally, with an aim to provide further economic relief to micro, small and medium enterprises (MSMEs) amid the ongoing COVID-19 pandemic, the Centre on Monday expanded the financial support being provided under the Emergency Credit Line Guarantee Scheme (ECLGS) by Rs 1.5 lakh crore.
The Centre also announced Credit Guarantee Scheme to facilitate new lending among the smallest borrowers and stated that this includes the 'stressed borrowers'.
As part of efforts to revive the tourism sector which has been hit hard due to COVID-19, Finance Minister Nirmala Sitharaman on Monday announced some measures including free tourist visas to the first five lakh tourists.
She said financial support will be provided to more than 11,000 registered tourist guides and travel and tourism stakeholders. (ANI)