Bengal finance minister Amit Mitra has prescribed a three-legged formula to shore up money to fight the economic catastrophe unleashed by the Covid-19 pandemic and support livelihood.

He reiterated the stance of chief minister Mamata Banerjee voiced before Prime Minister Narendra Modi that India should spend at least 6 per cent of GDP to reinforce the economy, ravaged by the ongoing lockdown.

In an interview with Karan Thapar, Mitra said there was enough headroom to raise resources because of three favourable factors.

India’s debt-to-GDP ratio stands at 69 per cent compared with 106 per cent in the US and 240 per cent in Japan, providing headroom for the country to raise more debt.

The record low prices of international crude oil also augur well for the country as it imports nearly 85 per cent of the requirement, he added. A lower oil import bill will translate into savings for the government.

Moreover, the country is sitting on huge foreign currency reserves, the highest in recent memory, he added.

“This is not the time to quibble over fiscal deficit,” Mitra said in the interview.

Mitra, who was the secretary-general of industry body Ficci before throwing his hat into politics and becoming the finance minister of Bengal, also prescribed how the money should be spent.

Rustling out numbers to claim that around 25 crore people in the informal sector have been rendered jobless in the lockdown which will complete one month on Friday, he prescribed parachute dropping of resources.

He advocated direct payment of survival money to the people, allocating 40 per cent of the 6 per cent of GDP, or about Rs 10 lakh crore earmarked for them.

The Centre should also provide liquidity to the formal sector and medium and small enterprises (MSME) as there is no liquidity in the system.

The MSME sector is often described as the backbone of the economy, contributing 30 per cent to GDP and 50 per cent to exports. “Give them a x ur-year tenure loan with one year of moratorium on payment,” he suggested, without going into the details of whether there would be any impact on the banking sector.