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Business Insider IndiaIndian Prime Minister Narendra Modi to address the nation at 8:00 pm tonight, March 24BCCL
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Prime Minister Narendra Modi is scheduled to address the nation tonight, March 24 at 8:00 pm.
While many believe that the measures announced by Finance Minister Nirmala Sitharam were in the right direction, more is needed to address the Coronavirus pandemic in India.
Here’s what experts like former RBI governor Raghuram Rajan, NITI Aayog CEO Amitabh Kant and others expect from the Modi administration’s financial package.
As the government moves to contain the Covid-19 pandemic, the economy is on a pause mode and the stock markets are slipping into an abyss. At the same time, there are concerns that daily wagers and other workers who lost their jobs will suffer from acute poverty, and small businesses will close down.
Experts hope that some direction can come from Prime Minister Narendra Modi’s speech tonight at 8:00 pm.
Finance Nirmala Sitharaman’s announcements on statutory and compliance changes — where many deadlines including income tax returns and GST filings have been postponed to June 30 among others things — have been lauded. However, many feel that more stringent measures are long overdue.
Market expert Ajay Bagga told CNBC Awaaz that these changes, while needed, were ill-timed and took up one-and-a-half hours of market time.
Earlier, former director of Infosys TV Mohandas Pai also questioned the administration on why the Corona package is taking so long to pass.
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“We must take stock of the economic losses in different sectors and announce a stimulus package that will help citizens in dire straits as well as industries directly impacted by the virus,” wrote Pai.
Here’s what India is expecting from Modi’s Financial package:
"We need to spend money on medical supplies, ventilators, and masks — on getting protective equipment for medical workers. This means getting resource from private, public, defence, retired — every resource — and quickly."
Former RBI governor Raghuram Rajan believes that the government’s first priority right should be medical supplies and use every resource available for it.
“This is not the time to discuss that,” he said during an interview with India Today. Rajan explained that even though temporary income support would make sense, the government’s resources are already very limited.
"The state’s first responsibility should be towards people who are at the margin and are going to lose their jobs, and should be able to provide them with a source of livelihood."
CEO of government think tank NITI Aayog Amitabh Kant believes that the Coronavirus pandemic is an 'extraordinary and challenging' time.
"There will be an economic impact and we should be ready for it. People are going to lose jobs not only in rural areas but urban areas. The state’s first responsibility should be towards people who are at the margin and are going to lose their jobs, and should be able to provide them with a source of livelihood. And that should be in the form of a direct benefit transfer. For MSMEs, This is not a time to over-concern yourself with fiscal deficit. This is a time to support the industry," he told the Observer Research Foundation (ORF) in a virtual interview.
“It's a cash flow problem, we need an unscheduled rate cut,” HDFC Bank managing director, Aditya Puri
As the equities markets are drying up, HDFC Bank managing director Aditya Puri said that the economy will land in a cash flow problem, in an interview with CNBC TV 18. Puri asserts that the crisis in the economy is not a case of companies failing. “This is a cash flow problem that should be helped by the government,” he said.
“Don’t want to criticise during a national crisis but regret to say we’ve lost valuable time,” said former Finance Minister P Chidambaram.
Congress veteran and former Finance Minister P Chidambaran is critical of the government for not implementing a nation-wide lockdown. “I was afraid that workers will migrate from cities to their villages and that is what has happened in the past few days. I hope we don’t pay too high a price on that account,” he said in an interview with The Telegraph.
“It will require astute economic management to, first, deal with the economic consequences of the crisis; and, second, to put the economy on the 5% to 6% growth path and further on a higher growth path. It will take two to three years,” he added.
“A rate cut, most agree is called for, but at the same time, it is also clear this will do little in isolation,” writes TV Mohandas Pai
Infosys founder Mohandas Pai points out that growth will be hit at least the next two quarters amid automobile plants being shut down, airlines suspended and other economic impact of the Coronavirus pandemic.
“That, of course, is also why most hoped that the prime minister would have at least outlined some of the major moves when he addressed the nation last week to prepare it for a lockdown; a deadline like a prime ministerial addresses helps finalize the plan faster than otherwise,” he wrote in the Financial Express.