Package for Indian economy : What is this?

There is no question that due to corona, the global economy is facing many significant challenges. Global consumption is at the lowest, and revenue for many countries is at the lowest. As many countries are declaring packages for their related economies, what about India? The package earlier stated was small compared to our economy’s size. Around 1.75 trillion rupees. Not much. Many countries declare approximately 10% of their economy, so yesterday, our prime minister announced a similar package.

The package was declared under Aatmanirbhar Bharat Abhiyan, which attracted criticism. But that is not my subject. My subject is the financial aspects of this package. After listening to this, I realize nothing is significant in this package. What RBI declares, package before this, and other related things are clubbed. I am not criticizing him for this, as India is not having the deep pockets to declare. But, as we are going into fingerprints of In speech, PM himself announces that this 20 trillion rupee package, Announcement from RBI, and Recent government announcements are also included. It makes it unattractive.

First of all, other than 20 trillion packages, my point is that lockdown will be here to stay in one format or another. The rule will be changed. We may be using hand sanitizer, and the use of masks will be increased. Our entertainment habits are all related to the Big mob, and we will change. But we can’t stop the economy and living in large part of India for a long time.

Twenty trillion rupee looks very similar to what Germany gave to its economy. 10% to its economy, but in India, the classification is the key.

Even in the old 1.75 trillion dollar package, 1 trillion rupees were repurposed. So It was not new. It was within budget. Only 0.6 trillion rupees ( 600,00,00,00,000) were newly raised. A similar happened here. RBI also gave some boost to the economy. As there is no demand for a loan in the market, banks and financial institutions hold sufficient big funds in the format of Government debt. That can be turned by giving a government guarantee. RBI and old packages can make 4.5 trillion rupees. The remaining amount can come through the extra debt the government is interested in raising. This may be coming through tax or debt, or divestment. As per many assumptions, only 6-8 lack crore will be real. I was expecting that the number was supposed to be big but no. By taking the risk of listening to criticism from my readers, I want to mention the TARP—troubled Asset Restricting Plan. During the 2008 crisis, the George W Bush government went on an investment spree and INVESTED big amounts into some private. There was a risk of losing this amount, but they were ready for that.

For writing this, I was listening to many experts. Sanjay Pugaliya from Quint is one of my favorites. What he mentioned, I am agreed. This is not a stimulus package. This will only support the economy from going into a complete mess, as the IIP Contracts first time since 1980. Something was needed to cover and protect the economy. Exactly what John Maynard Keynes said, when the private sector stopped its operations, it should be the government that needed to work out a plan to help the economy. Without this package, the unemployment rate will be over 33%, which right now is 25%+.

The expenditure part gives some idea of this package. As PM mentions, everyone, including Banks, MSME will be supported by this, which is a good thing. But I believe this was a time when there was an opportunity to ignore credit rating agencies as every country is working for betterment by ignoring its fiscal deficit. We live in an era where inflation may be needed as inflation up to a specific limit is good. I think we lost that chance.

The laborer crisis India is facing is a big challenge for India, but I can see many states are handling it the wrong way by canceling Labour laws. I don’t know whether it will attract investment, but this may change the structure of the Indian system.

I am waiting for more from the government as the finance minister will declare many new things.