By: Lalit Garg
Once again, incentive packages have been announced by the Central Government to bring back the ruined economy due to the Corona epidemic, how helpful will this package be in the future and speed up the sluggish economy; this will be dependent on upcoming time. But its basic objective is to activate the market, create demand. Demand will arise, only then will the emphasis on production and the way of investment will be opened. Due to the Corona epidemic and outbreak, impacts of negativity have spread over life, in which the most affected part is the economy; the silence of the market has hit the economy. The major base of the economy like demand, consumption, production, investment in the market has been shaken.
In such a situation, now the first task is to bring the economy back on track. Prime Minister Narendra Modi and his government have announced a third major package, taking advantage of the positive trend in new cases of corona infection continuously before the festivals. After a long wait, some good news has started coming to Corona, there is a possibility of the vaccine becoming available at the end of the year or at the beginning of the New Year. In the midst of these changing moods and clouds of desperation, the government has also announced its exemplary package to light up life in economic activities. This is the third time since May this year that the central government has announced an incentive package. The target of the first two packages of Rs 20 lakh crore was to revive the economy, but both of those packages did not have any miraculous and quick impact. But in the midst of changing conditions, these three packages will surely do something pleasant. The Indian economy has fallen by about 24 per cent in the June quarter, due to this it is the government’s compulsion to take similar steps.
In view of the fragility of the times, Finance Minister Nirmala Sitharaman has announced 73 thousand crores of concessions, reliefs and grants to remove the inertia in the economy and to create new demand in the market, through which she tries to uplift the condition of market and its components that are in huge loss due to corona epidemic and lockdown. The time-selection of these announcements is a symbol of auspiciousness and credibility because the festive season from Dussehra, Diwali to Chhath, Christmas and New Year is about to begin. During this period of two-and-a-half months, there is a special enthusiasm among the people about shopping and this is why the business world has special expectations from it.
Certainly in this new package, some facilities have been given to the central government employees. Government employees are the pivot of this package in the view of the government and they form an important part of the consumers. If they participate enthusiastically in shopping at festivals, then certainly new life can be communicated in the economy and markets of India. The reason why the government has taken steps is that it is expected to give a strong push to the economy, so that it can start and hold its pace. This hope will be further strengthened when the state governments and private sector companies, like the central government, will get a lot of money in the market if they give the same exemption to their employees in LTC. But the announcement of any concrete steps to motivate them to give such exemption is still awaited.
In order to speed up the market and economy, it is necessary to create an atmosphere of trust in the public, due to the possibility of any ominous decrease, people are busy saving by controlling their needs and expenses, their fear is over and they instead of saving economy can be improved soon if we emphasize on expenses. In the present circumstances; the whole philosophy of Charvak rests on that eat, drink and ash, even if you have to take a loan for this. The government has also adopted this philosophy, this time by adopting a formula to generate demand, by giving loans to employees, spending money. Although these packages are not very big, their importance is that people should be given money and they spend it.
Therefore the money that the employees will get is conditional. It is not that the money should also be stored. So far it has been that people are nervous about the state of the economy and their focus is on saving rather than spending. Anyway, the expenses of the people in the lockdown have come down considerably, but in order to give a balanced pace to the economy, it is necessary to increase the means of earning people, develop a spending mind-set, and open doors of new debt.
The Centre has opened a box for state governments as well. For capital expenditure, the Center will give twelve thousand crores as interest-free loan to the states for 50 years. In this too, making such a category, such conditions have been added, which state will have access to how much money, it is difficult to say. There is no doubt that the government is also tied in the present situation. He is under pressure to keep inflation and fiscal deficit under control. She cannot ignore the risk of spending too much. But the danger of not spending or spending less than necessary is also no less serious. State governments can also declare a concession for their employees, but it will depend on their economic conditions.
There are a large number of central employees, employees of public enterprises, banking sector employees in the country. But this class of regular income is small by population. Majority of the population in the country belongs to those working in the unorganized sector. Apart from this, the number of private sector workers is also very large. But in the private sector too, a large proportion of workers do not get the same salary allowances as the government employees, nor is there any social security like pension, while the participation of this class in the economy is also large. If there is a solution to give cash in the hands of every section of the country, then it is not difficult to give a boost to GDP by increasing expenditure.
The neglect of the hotel and tourism industry is not justified by half-hearted steps taken to increase demand. Keep in mind that this is where the industry has been most affected by Coronavirus infection. People associated with the hotel, tourism, etc. industry were hoping that after the fifth phase of unlock, people would come out to roam and gradually their business would return. But the government has deepened the blinds on this industry by giving the LTC money of central employees to spend on another item. The government has also announced a loan of 10 thousand rupees to its employees, but that too will have to be spent on purchases.
According to the latest data from the IIP (Index of Industrial Production), which shows the production situation in the factories, it registered a decline of 8 per cent over the previous year in August. It is clear that if this situation persists for a few more months, it will be difficult to save the economy from getting stuck in the mire of recession. Obviously, there is not much time left to take effective steps. Now our compulsion to create a society with uncontrolled desire, uncontrolled need and uncontrolled consumption. Even if these three ideals are contrary to the economy, this is the only way to balance the economic mess that has arisen from the Corona epidemic.