Crisis chain shattering economy, relief not enough, demands more from policy makers


Anand Mishra

Mumbai. Even as India Inc was already under deep trouble since last one year owing to various local and global factors with key parameters such as GDP witnessing regular downfall, the outbreak of Covid-19 crisis dealt a double blow rubbing salt on already bleeding economy. And if it was not enough, bunch of other unexpected crisis such as migrant issues, healthcare issues, joblessness, cyclones, fires, earthquakes, heat waves, locusts, domestic violence, poverty, food crisis, floods amidst heavy rain etc. further shattered the chances of recovery, besides posing a serious threats before the people and government of India. Making the things even worst, Indian government, according to analysts, have miserably failed to come up a compressive and inclusive disaster or crisis management plans to address the woes.

To begin with, just see what former Moody’s Investors Service has estimated. This worldwide bond rating agency has estimated India’s GDP growth to hit ‘zero’ in FY21 and pointing to a wide fiscal deficit, high government debt, weak social and physical infrastructure, and a fragile financial sector. Indian government, though announced a stimulus package of Rs 20 lakh crore as relief measures, but movers and shakers of the industries feel that government failed to show professional approach while bailing out distressed economy. To have a reality check, Winning Bizness spoke to several analysts and Industry experts with regards to the preparedness for the current combination of and most of them had negative experience to share.
Santosh Mandlecha, the president of Maharashtra Chamber of Commerce, Industry & Agriculture (MACCIA) said that government’s intention has neither been honest nor professional to address the industry woes and hence every entrepreneur has a long and painful story to share.

Speaking to Winning Bizness, Mandlecha said that the (union) government didn’t take stakeholders and beneficiaries into confidence before announcing relief measures and therefore, all this package and other announcement is going to be a “jumla”. Sharing his displeasure over the government’s move, Mandlecha said that despite two weeks have passed when government cleared Rs 3 lakh crore for Micro, Small and Medium Enterprise (MSME) funding scheme to mitigate the economic distress being faced by the small businesses, the disbursement has not started yet.
“And small entrepreneurs are largely depend on loans offered from credit societies or cooperative banks, which have been overlooked in the schemes,” Mandlecha said adding that there is huge unrest in trade and industry. There has been zero connect between policy makers and beneficiaries which have taken place several times not only in this government, but in previous governments also.”

Ritu Dewan, the Vice President of the Indian Society of Labour Economics and Visiting Professor of Institute for Human Development said that financial impact going to be much more severe than expected, thanks to the mismanagement on the part of crisis and the policies dealing with it. She said, “When there were only a few positive cases across the country, the whole country was put under forced lockdown and when virus has infected over 1.75 lakh people and numbers are increasing fast, this lockdown being relaxed. Nevertheless, just see the insensitivity of the government. This government gave only four hours to prepare for lockdown and gave four days to beat thali and ring ghanti.”

Former Director & Professor, Department of Economics (Autonomous) University of Mumbai, Dewan also said that 628 migrants have died so far and number counting up day by day. This crisis could have been handled better. Stimulus or relief package is nothing but a loan mela and offering cheaper interest rate won’t serve the purpose. Union government is unnecessarily putting undue pressure on state governments. The proceeds given under PM CARES fund are 100 % tax exempted while state relief funds are being offered only 50% tax exemption. This is highly objectionable.”
Deepak Mukhi, Head of FICCI – Maharashtra State Council- said that entire industry was expecting more from Indian government in form of stimulus package, essentially directly cash transfer into affected hands.

Mukhi asserted, “From the financial point of view, we had expected more fiscal stimulus while the current reforms are underway. But we are still pushing for it through our representations. Pragmatically, all stimulus cannot be given at one go, because no one knows how long this pandemic or other issues going to last. So periodic interventions will be required at different stages and we must not forget that finance minister has asserted that this (stimulus) is not the end of support.”

Former professor of department of economic, Mumbai University Dr Avdhoot Nadkarni suggested that since all the problems are surfacing unexpectedly, with no past record, therefore, government need to tackle all these systematically and individually.
“Financial problems are coupled with migrants exodus, labour problems, food and agrarian crisis, border dispute problems. A long term disaster or crisis management plans for all these problems don’t look feasible owing to the multiplicity and rarity of the problems. But first and foremost priority for the government is to bring dwindling economic back on track,” Nadkarni exuded.






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