The Policy Monitor
An analysis suggests that handing out ₹7000 per month for a period of 3-months combined with 10 KG of free food grains a month for 6-months will come to cost only 3% of our GDP! This would classify as “stimulus” as it revives demand, even though for basic goods and services from those whose propensity to save is minimal. Keynes suggested, during World War II, that the only way to fund the war expenses of the Allied forces was through a “forced transference of purchasing power”.
At the stroke of the midnight hour, when the world is grimly awoken with the stark realities of the COVID-19 pandemic, India’s 130 crore people will have made their tryst with a nationwide lockdown that will last for 21-days. How does India’s economic misconduct continue to afflict and fragment society?
rom a shifting world order to a co-ordinated economic slowdown, the pandemic of Coronavirus Disease (or COVID-19) has gripped us in times of persisting glut of distrust. There is no one way to interpret the implications – both current and protracted from inaction today.
The only path forward is to build trust in the bureaucratic and administrative functions of the state. Following or setting up clear objectives like in the China and South Korea model can push infrastructural growth and development.
The ability of a bank to absorb losses on its capital is compromised when its Capital Adequacy Ratio (CAR) is low. India, amongst its G-20 peers, falls on the lower side of the ratio as a proportion to risky assets.