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New Delhi: The government will implement relief measures in a calibrated manner to support companies affected by the Covid-19-induced blockade, rather than a Big Bang stimulus that has been the norm followed by other nations, the chief economic adviser to the government said on Wednesday. Ministry of Finance, Sanjeev Sanyal. .
“We understand the seriousness of the situation, but unlike other countries that have made a great package, we are (in the process) of implementing them. We have already done a few rounds … You will receive a package sooner or later, which is already being prepared by the finance ministry and other ministries. And you will also get more packages. We will distribute them in doses, “Sanyal said in a video conference organized by the PHD Chambers of Commerce and Industry.
Sanyal said the finance ministry’s first focus was to postpone year-end compliance and regulatory deadlines and make sure the poor get food and some cash, and take some steps to cushion the blow. The government is also working on large-scale reforms at the Center, as well as at the state level, to be introduced at a later stage, he said.
Since the imposition of the national blockade from March 25, the central bank and the government have taken a series of measures to help companies overcome the crisis after the covid-19 blockade. Last month, the central bank had reduced the repurchase rate, announced several measures to inject ₹3.74 trillion of liquidity in the system and allowed banks and other financial institutions to allow a three-month moratorium on the payment of installment loans to combat the disruption caused by the coronavirus outbreak. The finance ministry had also launched a ₹1.7 trillion food security and cash transfer aid packages to address loss of livelihood. Last week, the Reserve Bank of India (RBI) lowered the reverse repo rate, provided special liquidity support to non-bank microfinance and finance companies, facilitated the increase in emergency funds for state governments, among other measures.
Sanyal said that while the government will continue to spend, resources will remain limited. The government will take contributions from the industry, implement aid measures and evaluate its results, and therefore, he said, will first focus on cushioning the blow and work on rebuilding the economy and introducing reforms at a later stage.
“The first efforts will be to ensure that companies have enough working capital, the monetary transmission of the RBI flows to you, so that you have enough capital to stay alive in this period,” Sanyal said.
Sanyal also said that geopolitics, social behavior, politics will be fundamentally different in a post-19vid world, and India needs to take advantage of the situation, rebuild itself and come out stronger.
