P Chidambaram (File photo)P Chidambaram, a senior Congress leader, said Tuesday that the solution to the "crisis" was to increase demand by giving money to the people, particularly the poorer middle classes, just a day after Nirmala Sitharaman, Finance Minister, announced a package of support for the pandemic-hit economic sector.Monday's announcement by Sitharaman included Rs 1.5 lakh crore in additional credit for small and mid-sized businesses, more funds to the healthcare sector, loans for tourism agencies and guides, as well as increased funding for the healthcare sector. This was part of a package of support for the economy that has been hit by the pandemic.Chidambaram, reacting to the developments, stated, "Some elementary truths. Credit guarantee isn't credit. Credit is more debt. A debt-ridden company will not be approved for credit by a banker.The former finance minister stated in a series tweets that cash-starved or debt-burdened businesses don't need more credit and they do not require non-credit capital."More supply doesn't necessarily mean more demand (consumption). He said that more consumption (consumption), will lead to more supply.According to Chidambaram, a country where there have been job losses and wages or income reductions, demand will not increase.He stated that money should be in the hands of people, particularly the poor and the lower middle classes to solve the crisis.Monday's claim by Congress that the Finance Minister announced measures "delivered nothing but headlines", and called for the government to take steps to boost demand for the economy to "continue to be in the doldrums".
