Page 8 - EducationWorld June 2020

Editorial

STILL TIME TO BOOST AGGREGATE DEMAND from government with the remaining
15 percent paid by their employers.
Therefore, it’s a mystery why despite
n a dramatic broadcast on national advanced by her in media interviews over 1 billion citizens having been
television and radio on May 12, was that the first three tranches of the conferred UID (unique identity), the
Iprime minister Narendra Modi an- package were carefully designed to best that the BJP/NDA government
nounced a Rs.20 lakh crore (equiva- ease the flow of bank credit to indus- can do is to deposit a mere Rs. 500 per
lent to 10 percent of GDP projected for try to pay wages and reignite the fire of month into the bank accounts of 80
2020-21) stimulus package to get the India Inc, especially MSMEs. million women who have Jan Dhan
wheels of industry and business mov- One presumes the FM’s preference accounts.
ing. Three days after the final instal- for loans over grants and more than Against this, your editor has re-
ment of the economy stimulus pack- abundant caution that is a defining peatedly sent detailed proposals to
age was presented to the nation on characteristic of the reported Rs.20 the Union government and its several
May 17, the Times of India (May 20) lakh crore economy stimulus package, agencies to directly deposit Rs.4,444
reported that calculations and analy- is rooted in apprehension of damage monthly for the next 12 months or
ses of over a dozen banks — including to the banking system, impact on the Rs.6,000 per month for the next nine
the government-owned SBI — broker- fiscal deficit and runaway inflation. months, into the bank accounts of 150
ages and rating agencies, indicate that Yet it is pertinent to note that in sev- million poorest households to tide
after all the grants, loans and conces- eral countries around the world, these them over the Covid crisis.
sions of the package are added up, fears have been set aside to compen- The finance minister still has the
size of the stimulus is Rs.2 lakh crore, sate citizens for loss of jobs and live- time and opportunity to make good
equivalent to 1-1.3 percent of GDP. lihoods during the Covid-19 induced the Rs.20 lakh crore stimulus pack-
On the other hand, Sitharaman national lockdowns. age pledge of the prime minister by
maintains that the entire package In the US and Canada, all citizens setting aside Rs.12 lakh crore for in-
starting from March 26 when the first who have been furloughed (tempo- dustry, agriculture and the services
Rs. 1.7 lakh crore stimulus was an- rarily unemployed) are compensated sector to boost production and em-
nounced for industry and other stim- with government cheques of $1,200- ployment. The remaining Rs.8 lakh
uli given to banks to ease credit flows, $6,000) directly deposited into their crore urgently needs to be paid by way
plus the first three tranches of the last bank accounts. More wondrously, in of direct benefit transfer to 150 mil-
package add up to Rs. 12 lakh crore or the UK furloughed employees are re- lion poorest households as grants that
6.60 percent of GDP. The argument ceiving 85 percent of their current pay will also boost aggregate demand.

SILVER LINING OF FEEBLE STIMULUS PACKAGE bureaucracy — surely spur rural growth
and development.
Likewise, the privatisation of PSEs
he reportedly rs.20 lakh crore sequence of discouraging construc- proposal included in the stimulus pack-
post-Covid-19 economy stimu- tion of private warehouses and stor- age will be a gamechanger, if imple-
Tlus package announced by prime age units in which farmers could hold mented in letter and spirit. All PSEs in
minister Narendra Modi in a national stocks awaiting price stabilisation, non-strategic industries will be priva-
televised broadcast on May 12 has rather than distress sell their produce. tised. Moreover, private companies will
greatly disappointed India Inc and Refreshingly, the stimulus package in- be permitted entry into strategic indus-
most monitors of the Indian economy cludes provision of Rs.1 lakh crore for tries where the number of PSEs will be
because of its opacity and promise of an Agri Infrastructure Fund for loans restricted to four. By any yardstick, this
loans strewn across Central govern- to agri-business entrepreneurs (not is a radical and comprehensive dena-
ment programmes, and token grants government enterprises, please!) to tionalisation initiative. The plain truth
for stimulating aggregate demand. promote downstream warehousing, is that over the past several decades,
Nevertheless the uninspiring stimu- cold chain and food processing busi- the country’s over 500 perennially loss-
lus package has a silver lining. Buried nesses in rural outbacks. making PSEs and nationalised banks
within its details are declarations of In this connection, it’s noteworthy have bled the economy dry by their
intent to legislate comprehensive land that because of historical discourage- failure to generate surpluses for invest-
and agriculture reforms, and sweep- ment of a downstream agri-produce ment in public education and health.
ing denationalisation of public sector processing industry, India’s farmers in- The Modi government’s financial
enterprises (PSEs). cur a loss of Rs.50,000 crore every year stimulus package to revive the coma-
The agri reforms package con- due to produce despoliation. The pro- tose economy in the aftermath of the
tains the overdue proposal to abolish posed establishment of a national free Covid-19 crisis and the national lock-
the Essential Commodities Act, 1955 market for agri-produce will result in down is inadequate. But its agriculture
which imposes limits on the quantities high farm gate prices and huge reduc- revival and PSE denationalisation pro-
of wheat, rice, onions, cooking oil etc tion in wastage of horticulture produce posals — if forcefully implemented —
that wholesalers and traders can stock in particular. This coupled with ear- have the potential to engineer a clean
in warehouses and godowns. Enacted lier reforms proposed to allow contract break with the bankrupt socialist de-
to prevent hoarding and profiteering, farming and free sale of rural land, will velopment model of post-independence
the Act has had the unintended con- — if not sabotaged by the nit-picking India.

8 EDUCATIONWORLD JUNE 2020