Measures to reduce major problems in Indian economy
The great contraction of Indian economy would effect all products and services which are not essential for a living. Government revenues would decline because of lower consumption and resultant lower profits. It would set the economy back by 28 months - country has never seen such unprecedented happening in its recent history. There are two fears which caused the fall in demand - fear of coronavirus infection and the fear of future financial security. With no surety for their job or salary, people have stopped spending on non-essential products, affecting the country's industrial activity. This is where the Govt. should step in, not merely by giving sermons but by releasing its dues to the private sector and by increasing spending on big infrastructure projects. While the Govt. has been hesitant about deficit financing option, there appears to be no option other than this. The dipping into cash reserves of PSUs by the State Governments to bail them out, may not be available this y