Revival of Economy - Need of the Hour

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Various Epidemics, Wars, Pandemics and Natural disasters have challenged the human race before and they keep coming, testing our ability to survive. At present, the fear factor due to recurrent virus waves has pushed consumer confidence to rock bottom level. Uncertainty over the durability of the growth recovery is holding back both business and financial sector from taking any long term decisions. 

The sharp drop in the virus cases due to vaccinations and exercising other controls has enabled the states for a gradual reopening of their economy. Global growth is much stronger today, since the world was in a synchronized slowdown during the first wave. As we move towards in the coming months, policy priorities should continue to be in line with these economic needs. Until the economy fully reopens, targeted support for survival is still essential for households and sectors/classes worst affected by the intermittent lock downs. A more durable growth recovery still requires a serious multi-year push on infrastructure investments, so that the decline in India's trend growth can be arrested. 

The biggest stimulus that the economy needs now besides health sector is fiscal support. Though the Govt. is pushing all out efforts to bring the economy to a more productive level, following few suggestions shall a long way in helping the economy to turn the corner. 

1. Ever since the second wave of virus started, it is experienced that fuel prices are going up daily on Pan-India basis. This increase has a spiraling effect in the cost of almost all types of household products throughout. With increasing unemployment in industry and business circles, it has been a cause of pushing lot of people, besides  working class, (especially middle and lower level class) below the poverty level, households and small businesses as well. The reason stated, as is understood from the discussions in media since the money is required for free vaccines and ration supplies announced by the Govt. for the needy.

Suggest - In case, Govt. decide to bring price of fuel at pre-Covid level existed in 2018, this problem will be solved. People will have more money to spend, thus, increase in demand and more production-the circle of economy will start as usual.  - Creation  of 'Fuel Price Conservation Fund' will go a long way to contain future fuel price increases as and when they occur and shall save public from financial stress. It can be created by crediting @ Re. 1/- per litre of fuel sold in the country on a periodical basis.            

2. Govt. may consider introducing currency of Rs 1,000/- denomination to bring more liquidity in the economy instead of taking interest bearing loans. The currency, when put into circulation will bring in more options to establish/ upgrade Business and Industry - for local use and exports. The existence of this currency with terms and conditions will give more impetus to its circulation. 

Meeting social commitments like release of pensions to retired PF subscribers, release of grants and subsidies shall bring in more purchasing power in the hands of people to survive, causing increase in demand and of course, production which will solve the problem of jobs availability to skilled working class.

The above proposals will go a long way to revive the economy in a more effective and progressive manner.



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