No stimulus yet

by April 28, 2020 0 comments

As the nation stares at a prolonged lockdown given the fluid pandemic, economic revival specifics must be spelt out

There seems to be no unanimity over lifting the national lockdown and we may not be getting a single date applicable for the whole nation. With hotspots and red zones emerging on the virus map, containment still a massive challenge with unanticipated spikes and testing not enough with asymptomatic carriers moving around, it is difficult for affected State Governments and the Centre to reach a common meeting ground. Truth be told, this, in the end, cannot be a one-size-fits-all formula till a vaccine is found and the Centre has no option but to go by the State Governments’ recommendations and concerns, particularly those badly affected. So no big announcement came out after the Prime Minister’s teleconference with Chief Ministers on COVID-19 management except that the colour-coded zoning would continue and green dots would be opened up in a staggered manner so that economic activity could resume. While most Chief Ministers wanted resumption of economic activity to avoid a livelihood crisis, some Chief Ministers, like those of Odisha, Meghalaya and Goa, wanted an extended lockdown till May end and would like State borders sealed than risk a cross-flow of labour and import the virus. To sum it up, green zones would be allowed to open up economic activities with caveats and compliances while the risky zones would automatically go into the third phase of the lockdown. No inter-State travel, be it by air, train or road, of any kind except those specified already. Of course, one expected Prime Minister Narendra Modi to declare some sort of stimulus package, something that the entire nation demands, but nothing specific came out. Again. Except, of course, the Reserve Bank of India (RBI) did announce a Rs 50,000 crore bailout for mutual funds. But apart from assuring broadly that the economy would do fine, Chief Ministers got no concrete guarantee. Most of them have been demanding that at least the GST dues be released to them. Perhaps, Modi doesn’t want to sound grandiloquent or be held to his statements in these fluid and fickle times and promise something that may be unattainable. Perhaps, his economic advisers are against the giveaways leading to runaway expectations of handouts. But businesses are expecting some strong signal, for example higher working capital limits while small and medium scale enterprises are looking for some enablers to ride out the crisis and meet statutory dues.    

There may be piecemeal efforts, yes, but the nation expects the Prime Minister to reassure people that their savings are not at risk or that there were ways of clambering out of the trough. They know about social distancing and don’t need the Prime Minister to tell them about that in his speeches. He needs to share revival efforts instead with his people so that there is no uncertainty on the ground. Even now, despite easing of lockdown, only 16 to 17 per cent of the truck business is operational, plagued as it is by desertions of migrants and procedural hurdles in getting clearances in different States. Besides, every industry and sector has its own specific problem and demand that need to be at least listened to or acknowledged. Except Union Minister of Road Transport, Highways and Micro, Small and Medium Enterprises (MSMEs) Nitin Gadkari, who has been talking to Chief Ministers regarding infrastructure projects in their States, there has been no discernible outreach by any other Minister. Of course, there has been a bureaucratic reshuffle over the weekend, one that’s clearly geared towards economic recovery. The appointments of Tarun Bajaj and AK Sharma, both Modi aides who have been with the PMO, mean business. The former has been made the Department of Economic Affairs (DEA) Secretary in the Finance Ministry while the latter will take charge as Secretary, MSMEs. While we reorient ourselves towards building self-sufficiencies in manufacturing and import substitution in the long run, at this stage the small and medium industries can keep the wheels going at the level of local economies and collectively grease the bigger wheels of producers. Already, experts have predicted that 25-30 per cent MSME units many not survive the pandemic. Gadkari has said that the Government will set up a Rs 1 lakh crore fund to repay outstanding dues owed by the Central and State Government undertakings to them. But even the big industries need some encouragement. And that better come fast and soon. All major leaders of the world have done so and on a day we were declared the third highest military spender, after the US and China, we wished there was some news to alleviate the pains of what looks like a prolonged lockdown.

(Courtesy: The Pioneer)

No Comments so far

Jump into a conversation

No Comments Yet!

You can be the one to start a conversation.

Your data will be safe!Your e-mail address will not be published. Also other data will not be shared with third person.