Government should roll out measures immediately to alleviate woes of pandemic-hit citizens

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If not done even now, when will the government do it? Uday Kotak, one of the country’s top bankers, says the time has come when the government will have to print notes and distribute them to the poor and also help those industries where there is a danger of loss of employment on a large scale.

Kotak is not the first man to make a statement of this nature. Many well-known economists and politicians have said the same thing since the coronavirus crisis began. A survey by CMIE revealed that the earnings of 97% people in the country have come down compared to a year ago. The condition of industries and businesses is also grim with even two-thirds of the factories that can make the goods not able to sell. Thus, banks are again fearing a pile-up of bad loans.

Lenders in a quandary

The Reserve Bank of India held separate meetings with top officials of government and private banks to understand the situation. However, they were told that government schemes should be implemented at a rapid pace. But in response, a demand came from his side for another moratorium. It is clear that the lenders are not in a condition to pay the installment at this time. Banks demanded that the scheme of exemption in depositing installments on small loans should be brought back and the restructuring should also be allowed to change the installment and tenure of large loans.

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Look at the results of big companies in the last year or the stock market index, there is a different picture. The profits of companies are showing a tremendous boom and the same is the case with the Sensex and Nifty. There has been such a surge in the wealth of some big businessmen that the rich around the world are seen to be pale in front of them.

So, what is the truth? Unemployed middle-class, recession-hit small-scale businessmen, bankers troubled by fears of no installment coming back, Kotak advising to distribute money to the poor, the euphoria in stock markets, the results of companies or the feel good advertisements on the front pages of newspapers? None of these are lies. And this should be the major concern of the government. This should be the biggest worry of the government. It is the government’s duty to provide relief to the common man and take steps to pull the economy out of the slumber.  Kotak is also reminding the government about the same and a noted economist like Abhijit Banerjee has also been saying the same thing throughout the year.

Ball in government’s court

Government will have to increase expenditure on a large scale and employment-generation needs to be given a facelift and money needs to be directly put into the accounts of citizens. This will also save life and livelihood, and both these can also play a big role in bringing the economy back on track. The question is when the government will show this courage.

(The writer is former Editor, CNBC Awaaz and runs the YouTube channel 1ALOKJOSHI. Views expressed are personal)