India is in the middle of lockdown which is hurting Indian economy badly. Earlier during 21 days of lockdown, it costs $4.5 billion into the economy every single day. Lockdown pulls down GDP growth sharply as IMF predicts India to grow at 1.9% in FY21.
Measures:
State and centre have to come together to help poor and lower middle class for food, healthcare and shelter. Government already announced 1.7 lakh crores as direct benefit transfer, cash transfers to poor people but it must be implemented in an effective manner so that every individual can get the share of it which will allow needy households to sustain.
After announcing Rs. 20 lakh crore package India’s Fiscal Deficit likely to be 7.9% in FY 21, according to SBI research. Government also announced an additional borrowings of Rs. 4.2 lakh crores i.e 2.1% of GDP. Government must check debt-to-gdp ratio because higher debt levels will put pressure on Indian Sovereign Bonds and upper limits of debt will not push growth for the economy.
Without proper development of healthcare system, India cannot reboot the economy. Further across India, a total of 586 hospitals have been dedicated to Covid-19. In addition to this, Government need to ramp up health education and upgrade technologies as well as facilities with Public Private Partnership Strategy.
MSMEs are the biggest hit due to Covid-19 pandemic. MSME contributes 30% to the Indian GDP through manufacturing and exports. MSME sector is being supported by government through different measures in the last week. But all the measures for MSME till now going to increase debt liability and there is nothing to create improvement for demand.
India is giving best to fight for Covid-19 situation. And most importantly we don’t know when it will end. Still,government need to take steps against this issues mentioned over so that post Covid-19 recovery will come at a reasonable pace.
Financial Economics 