Uncertainty has clouded the actions needed for the upliftment of the economy and only the future holds the answer to it. With Coronavirus(Covid) having claimed almost 4000 lives in India, things have been easy for neither the people nor the Government. On Friday, the RBI projected the economic contraction in 2020-21. The government has already announced an economic package of Rs 20.97lakh crore.
After the prediction, Reserve Bank of India said that the GDP of 2020-21 is probably going to be in the negative zone because the effect of the pandemic has been deadly to our economy. They could be some growth in the second half of 2020-21, that is, from October to March although that too is uncertain.
Nirmala Sitharaman, Finance Minister of India, clarified on Saturday that future fiscal decisions to revive the economy are solely dependent on how the COVID -19 situation works out eventually and nothing is of certainty at this point. In a conversation with BJP leader Nalin Kohli, Sitharaman said, “I’m not closing the door at all. I want to keep getting inputs from industry, implement what we have announced, and depending on how things pan out, we have to respond accordingly.
We are only two-month-old in this year, we have 10 months to go.” She said, with no guarantee of how the pandemic will eventually present itself, a “realistic assessment” of the economic growth is not possible at the moment. An economic package for fighting the COVID crisis was declared last Saturday by Finance Minister. After a heavy discussion and consultation with ex-bankers, economists, members of the Finance Ministry, this package was introduced to provide more liquidity in the economy and revive demand.
“The package was designed keeping in mind that we are facing a situation which is exceptional and therefore whether the contraction is going to be this much or that much, we didn’t have the luxury of data to guess-estimating them. However, the spirit of that thought has been kept in mind that we have to now look at complete contraction and if we have to stimulate the economy keeping that in mind what is that we have to do,” she said.
The aforesaid package included 5 tranches:-
₹3.70 lakh crore support for MSMEs
₹75,000 crore for NBFCs
₹90,000 crores for power distribution companies, free food grains to migrant workers, increased allocation for MGNREGA scheme, tax relief to certain sections
₹15,000 crores allocated to the healthcare sector to deal with the pandemic
40,000 crore more MNGREGA to support migrants.
Regarding kick-starting the economy, she said, “I’m sure the Indian entrepreneurs are also going to come out after they test the waters post the lockdown. We have come with measures which will get more liquidity in the economy if there is more liquidity in the economy people will get money in their hands and that will kick-start the economy, bring more demand.”
She assured speedy FDI clearances are in priority and the Government is ensuring it through administrative departments, providing policy certainty and easing compliance burden for companies.
Mohona Bhattacharya
Banaras Hindu University 2nd Year, English Hons. Varanasi, UP.
Mohona is an avid reader and an equality seeker. She takes a keen interest in painting and finds solace among books, coffee, nature, and dogs.
