Rathin Roy, director of National Institute of Public Finance and Policy, an autonomous research body, said declining consumption and investment is not matched by the increase in government spending.
"Neither the Reserve Bank of India nor the government can save the economy. The private agents will have to ensure that they will drive the economic growth and take the lead", Roy said at a webinar organised by Indian Chamber of Commerce.
However, Prime Minister Narendra Modi had recently said the economy is showing "green shoots" as the country emerges from the coronavirus lockdown.
Regarding the Rs 20 lakh crore financial package announced by the government, Roy said the public sector banks have been asked to lend more.
"The government has chosen the credit and monetary policy route to boost the economic growth rather than the fiscal mode," he said.
Roy said the issue of migrant workers will have an impact on the economic growth and availability of quality workers in the post-COVID-19 world will be a challenge.
State Bank of India's chief economic advisor Soumya Kanti Ghosh said the GDP for one quarter has been lost, amounting to Rs 40-50 lakh crore, due to the coronavirus crisis.
"No amount of fiscal or monetary support will help recover that," he said, adding that the pandemic has come at a time when the economy was already in a recessionary mode.
Ghosh also said the issue of migrant workers due to the lockdown "has not been handled well".
He said the RBI has been proactive with its steps to revive the economy.
"When the economy is contracting, more credit offtake will lead to bad asset quality, and this is where the fiscal policy will come into play," he added.
Rajat Kathuria, director and chief executive of the Indian Council for Research on International Economic Relations (ICRIER), another policy think-tank, said it is worrying that the unemployment is going up among the low- skill, uneducated and self-employed workers.
He expressed hope that workers will return to their workplaces as there are little employment opportunities in rural areas.
According to him, India should invest more in creating a welfare state. dc BDC BDC