Terming the second stimulus package announced by the central government Friday as "grossly inadequate", the Communist Party of India-Marxist (CPI-M) on Saturday said the measures would fail to stimulate the economy.
"The stimulus package is grossly inadequate to meet the impact of the global crisis," the party politburo said in a statement.
The government and the apex bank announced a slew of measures to cushion the impact of the global slowdown on the Indian economy, lowering the cost of funds for commercial banks and infusing further liquidity into the financial system.
"There is only a mention of the meagre Rs 20,000 crore (Rs 200 billion) - less than 0.5 per cent of India's GDP - additional plan outlay announced on December 7, 2008, and no further spending plan has been announced. What is required is a comprehensive debt-relief package for the state governments and real transfer of resources from the centre to the states," the politburo said.
By ruling out any further increase in public investment in the current financial year and announcing that further fiscal measures will only be contained in the annual plan for the next fiscal, the United Progressive Alliance government is shifting the burden on to the next government, the CPI-M said.