Martin Wolf said the Indian government has to make “very large guarantees” to companies going forward as companies do not have the capacity to sustain during the lockdown period.
Martin Wolf, Chief Economic Editor, Financial Times. (Photo: World Economic Forum)
Top financial commentator and Chief Economic Editor of the Financial Times Martin Wolf said India must protect domestic companies at any cost in order to restart the economy after the virus is contained.
Speaking to India Today TV News Director Rahul Kanwal during the E-Conclave Corona series, Wolf shares key tips on how India can shield its companies from the economic impact of the virus.
Wolf said the Indian government has to make “very large guarantees” to companies going forward as companies do not have the capacity to sustain during the lockdown period.
The top business commentator suggested the government should take elaborate steps to help restructure company debts, offer a pragmatic relief package for them and also put on hold all current bankruptcy proceedings against companies.
Wolf’s comments come at a time when millions of firms in India are requesting the government to introduce a relief package so they can pay their employees and take care of other costs.
He also spoke a range of issues including the future outlook of world economy and how much time it could take for the entire world to recover. As per Wolf’s estimation, the world could see face a massive economic slowdown for the next two years.
However, the upcoming year will be extremely bad in terms of economic growth, said the top business editor. He also said that the projections of global and Indian growth offered by the International Monetary Fund (IMF) are optimistic and they may be “twice as bad”.
Martin Wolf said that there could be a sharp recovery after the next two years, provided that the world finds a cure for the virus soon. In case the pandemic lasts longer, he said developed economies around the world could face severe trouble.
Wolf also offered another advice to the government and said another top priority apart from saving companies is to protect the livelihoods of a large number of people. “India has to protect people who have been drastically affected and are suffering the consequences including job losses. Ensuring that people’s welfare continues to be supported in necessary,” he said.
He feared that such a move will strain India’s fiscal deficit, but added that all such concerns should be put on hold to effectively fight the virus without affecting citizens.