Tell govt to take fiscal measures: Chidambaram to RBI Governor after fresh cut in repo rate

Senior Congress leader P Chidambaram on Saturday asked RBI Governor Shaktikanta Das to "bluntly" tell the government to do its duty and take fiscal measures if he feels that the demand has collapsed and the GDP growth is heading towards negative territory.

He also asked if the prime minister or the finance minister will laud themselves for the fiscal stimulus after the RBI chief's statement.

"Governor Shaktikanta Das says demand has collapsed, growth in 2020-21 headed toward negative territory. Why is he then infusing more liquidity? He should bluntly tell the government 'Do your duty, take fiscal measures'," the former finance minister said in a tweet.

"Even after RBI's statement, is the PM or Nirmala Sitharaman lauding themselves for a package that has fiscal stimulus of less than 1 pc of GDP," he asked.

Chidambaram had earlier said the fiscal stimulus package announced by the government is "hopelessly inadequate" given the gravity of the economic crisis.

He also trained his guns on the RSS, BJP's ideological mentor, on Saturday.

"RSS should be ashamed of how the government has dragged the economy into negative growth territory," he said on Twitter.

Painting a gloomy picture of the economy, the Reserve Bank of India (RBI) had on Friday said the impact of COVID-19 is more severe than anticipated and the GDP growth during 2020-21 is likely to remain in the negative territory.

The outlook of inflation also remains "highly uncertain", Das had said while announcing a 40-basis point cut in the repo rate as part of the monetary measures to deal with the current crisis.

It is the second sharp cut in the key policy rate in two months. On March 27, the Monetary Policy Committee (MPC), the rate-setting panel of the RBI, had cut the key short-term lending rate by 75 basis points.