Modi's 20 lakh crores

Our Prime Minister, on 12th May 2020, at 8:20 PM that is, 20:20 announced a 20 lakh crore economic package in his speech of 20 mins. After that, Our finance Minister introduced the details of that package part by part over the next five days. Come let us find out what this package of 20 lakh crores holds for the middle class people or the common peoples. And the biggest question arises " Is the 20 lakh crore package really worth 20 lakh crores..??"

When we hear 20 lakh crore, then we might assume that this means that our government is going to offer us this amount or government will spend this amount to aid the public. But it is not so.There are two types of policies in economics - monetary and fiscal policies. The monetary policies are introduced by country's central bank (RBI). Monetary policies basically involves fluctuating the interest rates, change the supply of money in order to control inflation. This is done by RBI. And the other policy which is introduced by the government. In which government have the authority to alters it's spending like change in taxes. RBI is independent of the government. And government makes fiscal policies. In this 20 lakh crores, 8 lakh crore is a liquidity infusion by the RBI. So it classifies as a monetary policy and it is unfair because whenever we have talked about the economic packages of the countries across the world, we consider only the fiscal packages not the monetary packages. But here, our Indian government combined both the packages together to show that the " government had rolled out a package of 20 lakh crores" Ultimately the point is that the 8 lakh crores from the RBI would have negligible effect on the end consumer. Out of the 20 lakh crores, 12 lakh crores remain which is the fiscal package from the government in which government had already announced the 1.7 lakh crore in the previous package and is being recounted in this. And there are several other things in this remaining that the government has already announced earlier but they are recounting. From the new package, government announced the loans worth 3 lakh crores rupees for the MSME's (Micro, small and medium enterprises). The companies would definitely rise but this is a loan. So they have to return it after some time. There would be liquidity infusion worth 90,000 crore rupees for the power distribution companies, it is also a loan and it is being expected that the power companies would pass on the benefits to the consumers. Our farmers would be given credit of 2 lakh crore rupees. This, again is giving out loans at lower interest rates. A special credit facility worth 5,000 crore rupees has been provided for the street vendors. This too, means giving out loans to them. A supply of free food grains will be provided for the migrant workers for the next two months which would cost around 3,500 crore rupees and the government claims that this will benefit 8 crore migrant workers. Basically, the people and the companies are being given out loans at lower interest rates. It would definitely benefit some companies and some people but at the end, there are merely loans being given out and soon will have to pay it back. So, overall this is not reducing the pressure but actually creating.

So, this is my opinion. Do tell me your opinions. Do write down your opinions in the comments below.