Several economists and businessmen have expressed their disappointment with the contents of the financial package announced by the government to face the unprecedented economic crisis brought about by the Covid-19-induced lockdown, the suddenness and severity of which had itself surprised many epidemiologists.

The callousness toward the migrants and lack of immediate preparation to send them back – or at least feed and house them – before the lockdown have shocked many. The financial package includes many liquidity enhancement policies already announced by the Reserve Bank of India and new loan guarantees that are unlikely to be effective when demand deficiency discourages producers to take loans.

It also includes some otherwise-desirable structural reform proposals, like those for agricultural marketing, power distribution companies or privatisation of inefficient public enterprises. But as is well known, a fire outbreak is not the best time to sit down and talk about reforming the ways of running the fire station.

While the hype was about 10% of Gross Domestic Product, the fiscal package contained immediate relief of not much more than 1% of the GDP.

The case for cash infusion

In view of the severe job and income losses faced by the poor, many economists have stressed the need for larger cash assistance to those...

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