E-Conclave Jumpstart India: Top economists decode Rs 20,000-crore coronavirus relief package

In a bid to give a helping hand to the battered Indian economy, Prime Minister Narendra Modi had announced Rs 20 lakh crore special Covid-19 package in his address to the nation on May 12. Over the next five days, Union Finance Minister Nirmala Sitharaman provided details of the Covid-19 package ending up with measures worth Rs 21 lakh crore for an Aatm Nirbhar Bharat.

The relief package announced, though soft on direct stimulus, offers enough liquidity by creating emergency credit lines that companies can avail from banks.

Industry leaders have raised their objection with the package saying this is too liquidity centric while the lingering problem with the Indian economy is not of liquidity but of demand.

FOLLOW FULL COVERAGE OF INDIA TODAY E-CONCLAVE

India Today TV will be joined by a host of the sharpest economic minds in the country to decode whether this package is an economic booster or just a grand loan mela. Deconstructing stimulus 2.0 at the India Today e-Conclave Jumpstart India series are Principal Economic Adviser Sanjeev Sanyal, director of National Institue of Public Finance and Policy Rathin Roy, senior lecturer at Harvard Business School Vikram Gandhi, economist and former chief economic adviser Arvind Virmani, Citi Group’s chief India economist Samiran Chakraborty and HSBC’s chief India economist Pranjul Bhandari.

Here is what they have to say:

WHY NO DIRECT CASH TRANSFER TO MIGRANTS

Sanjeev Sanyal: There were 2 elements to package. One was the supply side — unapologetic pitch for privatisation, opening up of agriculture, labour laws. Then there was the issue of what to do with demand. We have done a bunch of things to pump cash through. The first package also covered this. Also made arrangements for enhanced use of MGNREGA. It’s not as if we are not creating different avenues for cash to trickle down to the bottom of the pyramid. But we have to take into account that unless the business sector, particularly MSMEs, don’t have liquidity, there will be a serious jobs problem. We ensured this sector gets an adequate amount of cash.