Put money in hands of people, Chidambaram on stimulus

Senior Congress leader P Chidambaram on Tuesday said the answer to pandemic-hit economy "crisis" is to spur demand by putting money in the hands of the people, especially the poor and the lower middle classes. Reacting to the development, Chidambaram 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, the former finance minister said in a series of tweets. "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/wages have been reduced

The answer to this crisis is to put money in the hands of the people, especially the poor and lower middle classes

— P. Chidambaram (@PChidambaram_IN) June 29, 2021

The Congress had  claimed that the measures announced by the Finance Minister "delivered nothing but headlines" and said the government should take steps to spur demand to revive the economy "which continues to be in the doldrums".