In a discussion on NDTV about the contents of the third tranche of Prime Minister Narendra Modi’s stimulus package for the economy, Yogendra Yadav, one of India’s most respected psephologists, called it ‘entertainment’. Yadav is a gentle human being who goes out of his way to avoid giving offence. Above all on TV. So “entertainment” was the most civilised word he could think of. I will be a little more blunt. Not just the third tranche, but the entire ‘stimulus package’ advertised by Modi on May 12 is a gigantic confidence trick being played upon a desperate public with money that does not exist.
First, of the Rs 20 lakh crore, Rs 1.7 lakh crore had already been disbursed to the government in the first days of the lockdown. Its salutary effect is therefore long over. Another Rs 5.2 lakh crore was to have been disbursed as loans by the Reserve Bank, which brought the borrowing rates for doing this down to levels not known since 2010. But there were no borrowers. So the commercial banks were left with no option but to park all of that money in the RBI’s reverse repo account, which swelled from Rs 3 lakh crore on March 27 to Rs 8.4 lakh crore by the end of April.
On every occasion, he has continued to forge ahead with his folly, sustained by an iron, almost manic, determination to keep going till he snatches victory out of the jaws of defeat. A massive infusion of purchasing power will never happen now because it will be a tacit admission that he made a mistake. That will not happen, because Narendra Modi believes his appeal depends on the myth of his infallibility.