Skip to main content

Govt of India's stimulus package grossly inadequate, can't revive economy: Economist

By Dr Arjun Kumar, Ritika Gupta*

Delivering a Special Lecture organized by Centre for Work and Welfare (CWW) at the Impact and Policy Research Institute (IMPRI) on Labour, Employment and Pandemic: Policy Suggestions and Way Forward for Budget 2021, Prof Santosh Mehrotra, retired professor, Jawaharlal Nehru University (JNU), observed that the fiscal stimulus provided by the Government of India (GoI) post-lockdown was severely inadequate. It was only a fraction of what was provided post the 2008 global financial meltdown where the effects on the economy were comparatively mediocre, he maintains.
Prof Mehrotra stated that while going into the ill-planned lockdown, India already had about 280 million unemployed people. He added that the growth rate of the country was falling quarter by quarter since 2016 and had hit a dismal low of 4.1% in early 2020. The lockdown imposed in March, which is touted as the most stringent in the world by various reports, skyrocketed India’s unemployment rates and contracted the growth rate lower than any other G-20 country, he added.
To revive India’s growth story and to cash in on our rapidly closing demographic dividend window, Prof Mehrotra postulated four essential features that must be included in the Budget 2021. This include an increased expenditure in infrastructure and the health sector and an urban employment guarantee. The fourth most significant measure according to him is a minimum income guarantee of Rs 500 per month to the poor households. 
While Rs 500 per month is equal to what the PM-KISAN offers, where Rs 6,000 per annum is transferred to a farmer household, Prof Mehrotra suggested that since the government accepts this number, it could do well to extend this to the rural poor non-farmer households and urban poor households as well for cash transfer.
He explained, this could be done as a substitute to the PM-KISAN scheme where the benefits would be extended not just to the owner cultivators but also the tenant farmers, landless labourers and the rural and urban poor. The beneficiaries should be identified using the Socio-Economic Caste Census (SECC) data. This will cost the exchequer only about Rs 10,000 crore more than the expenditure on PM-KISAN, estimated Mehrotra.
Prof Dev Nathan dwelled upon the issues in the political economy. He highlighted how there is a historical disparity whereby the focus has been on the hyperscale sector and the rural sector has been given very little.
Panelist Prof Sarthi Acharya, Managing Editor of Indian Journal of Labour Economics (IJLE), highlighted the structural inefficiencies that existed in the economy since 1990’s which has exasperated the effects of the pandemic.
He batted for long-term industrial and agricultural policies and focus on micro, small and medium enterprises (MSMEs) and value-added exports. He also mooted the need for restarting the 5-year planning model which was also corroborated by Prof Mehrotra.
Panelist Dr Amrita Pillai, research fellow at the The National Institute of Public Finance and Policy (NIPFP), suggested measures that need to be included in the Budget 2021 to give a push to the MSME sector. This included a direct support scheme, extending the Emergency Credit Line Guarantee Scheme (ECGLS) and reviewing the compliance requirements for MSME’s to promote ease of doing business.
The session was chaired by Prof Dev Nathan and moderated by Prof Utpal Kumar De, professor at the North-Eastern Hill University (NEHU). Other participants included Prof Abdul Wadud‬, Professor of Rajshahi University, Bangladesh and Prof Elias Hossain from Bangladesh.
---
*With IMPRI. Acknowledgement: Nikhil Jacob, based in Goa, research intern at IMPRI, New Delhi, pursuing post-graduate diploma in environmental law and policy from the National Law University, Delhi

Comments

TRENDING

RSS wanted Constitution 'replaced' by Manusmriti which abused Dalits, women

By Shamsul Islam* The Constituent Assembly of India finalized the Constitution of India on November 26, 1949 which is celebrated as the Constitution Day This Constitution promised new born Indian Republic a polity based on democracy, justice, egalitarianism and rule of law. However, RSS was greatly annoyed. Four days after the historic event of approval of it, the RSS English “Organiser” in an editorial on November 30, 1949, complained:

Nuclear energy 'can't solve' global warming, will 'strain' financial, natural resource

Counterview Desk  Taking strong exception to Rafael Mariano Grossi, Director General, International Atomic Energy Agency (IAEA), who has favoured nuclear energy as a solution to global warning, well-known power and policy analyst Shankar Sharma has said that the IAEA chief's “unsubstantiated advocacy” of nuclear power is associated with “diversion of considerable amounts of scarce resources, both financial as well as natural, of many developing countries, such as India.”

Covid taught us: Exams are cruel process of 'eliminating' those seeking education

By Sandeep Pandey, Seema Muniz, Gopal Krishna Verma* Some people are disheartened with the disruption in children’s education due to the menace of Covid and the successive lockdowns. While a number of children are getting used to attending online classes, their counterparts from the weaker socio-economic backgrounds continue to struggle either because of unfamiliarity with technology or because of having to share a single device with their siblings and/or parents. More unfortunate ones have been completely pushed out of the system which has resulted in the virtual drop in the rate of enrolment.

Book on Bhil rebels offers other side of history, neglected by 'nationalist' historians

By Vidya Bhushan Rawat*  One of the major accusations against Indian historians is that of neglecting and ignoring the role of the marginalised in the freedom struggle. Most of the time, we are ‘informed’ that there were some ‘heroes’ and ‘villains’ of the freedom movement, all of them belonging to the same stock of caste as well as ‘power’ positions as their opponents.

Mysterious death of Kishenji 'triggered' series of splits in Maoist camp in India

By Harsh Thakor* On November 24 fell the 10th death anniversary of Kishenji, a prominent Maoist leader, he was also a poet, a scientist, and a soldier. Since his school days he dreamt of planting the seed to create new man. Born in 1954 in Peddapally town (in Karimnagar district, north Telangana), Kishenji was raised by his father Venkataiah (a “freedom fighter”, he called him) and a progressive mother, Madhuramma.

Govt of India responsible for 71% delays in NREGA wage payments, say economists

Counterview Desk  In an open letter to Prime Minister Narendra Modi, more than 70 economists have urged the Government of India to release “adequate funds” for implementing the rural jobs guarantee scheme under the MGNREGA immediately, pointing out that the pandemic continues to adversely affect the living condition of working families.

Learning to bridge 'huge chasm' between highly educated, illiterate, badly literate

By Shrey Ostwal, Sandeep Pandey*  The pivotal point of Mohandas Karamchand Gandhi’s journey to become Mahatma Gandhi began when his “political guru” – Gopal Krishna Gokhale – advised young Mohandas to travel around India. This rigorous journey was essential for Mohandas to understand his country and countrypersons better if he were to fight the inhumane and unempathetic British regime which had been looting India of its glory for about two centuries then.

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Arrest of top J&K civil society leader shows contempt for international law: PUCL

Counterview Desk  Commenting on the arrest of Kashmiri human rights defender Khurram Parvez, India’s top human rights advocacy group, People’s Union for Civil Liberties (PUCL), has said that the Government of India action is “one more attempt ... to silence peaceful, non-violent dissenters”, adding, it suggests how “a brutalizing state machinery" has been acting.

Dalits 'celebrate' Constitutional Power Era in 12,500 villages of 16 districts on Nov 26

By Pradip More*  It is a fact that the majority of the people do not have much knowledge about the law, and especially the Constitution. Yet, today's younger generation is becoming increasingly aware of its rights. One wished it would have been good if it was taught about the Constitution well in the schools.