FALLING SHORT

The central government’s response to the economic fallout of coronavirus has been a mix of a few procedural and compliance relaxations, liquidity injection in the banking sector through the Reserve Bank of India (RBI) and a small package aimed at the poor and underprivileged. In short, it has been tepid and cautious.

With several agencies predicting doom and gloom for the economy — the latest is World Bank forecast of 1.5-2.8 per cent FY21 real GDP growth versus 6 per cent previously — the government’s response to the situation has baffled many. The size of the package for the poor and underprivileged — ₹1.7 lakh crore — is less than 1 per cent of GDP, even when a large number of economists and experts are asking for a package that’s 4-5 per cent of GDP or ₹10 lakh crore. Even a large portion of the ₹1.7 lakh crore package has been mostly budgeted for earlier; the government is incurring an incremental cost of only