Manmohan opposes DA hike freeze; Sonia writes to PM on MSME package

Former prime minister Manmohan Singh criticised the government’s move to freeze the hike in dearness allowance (DA) of 5.6 million government employees, and asked his party to stand with the employees.

In a video posted by the Congress party on Saturday, its former chief Rahul Gandhi and senior leader P Chidambaram pointed at the “extravagance” of the government spending money on the central vista development project and bullet train while subjecting government employees and even pensioners to cuts.

The Congress posted excerpts from a video conference of the party’s recently constituted 11-member consultative group.

In the excerpts, the former prime minister said, “I sincerely believe it is not necessary at this stage to impose hardships on government servants and also on the armed forces people.”

Singh, 87, who heads the consultative group and is a votary of putting money in the hands of people as a means of economic revival, also said, “We should be on the side of people whose DA is being cut.”

The finance ministry on Thursday halted the hike in DA for central government employees and dearness relief (DR) for pensioners till July 2021.

In the video, Rahul Gandhi said the government was taking money from the middle class, not giving it to the poor, and spending it on “extravagant expenditure” like the central vista.

Chidambaram said the government should first halt expenditure on bullet train and central vista development before freezing DA.

MSME package

Congress interim president Sonia Gandhi in a letter to Prime Minister Narendra Modi on Saturday sought immediate support for the micro, small and medium enterprises (MSME) sector to save it from ruin.

She suggested that the PM announce a Rs 1 trillion “MSME wage protection” package, establish and deploy a credit guarantee fund of Rs 1 trillion to provide immediate liquidity to the sector and explore a waiver/reduction of taxes for MSMEs.

Sonia Gandhi said actions taken by the Reserve Bank of India (RBI) must get reflected in actions by commercial banks to ensure adequate, easy and timely credit supply to MSMEs. She said all these measures need to be supported by an expansion and extension of the RBI’s moratorium on payment of loans for MSMEs beyond the stipulated period of three months.

“High collateral security is leading to denial of credit. Same is the case with limits on ‘margin money’ being extremely high. These factors combine to ensure a lack of access to available credit for MSMEs and must be addressed,” the Congress president said.

She said the sector, which employs 110 million people and accounts for almost 50 per cent of India’s exports, needs immediate help. “At this moment, without appropriate support, more than 6.3 crore (63 million) MSMEs stand on the verge of economic ruin,” she stated in the letter.

According to her, every single day of the lockdown comes at a cost of Rs 30,000 crore to the sector and its employees are at risk of losing jobs.