We saw how confusion in rules about air travel affected passengers. Agencies and authorities should give people adequate notice and allow them to plan.
The future of Covid-19 in India and its impact on the economy and govt revenues is unknown, so it’s better not to exhaust all options by May.
Economic package assumes people will go back to villages, and rural incomes need to be boosted. Modi govt seems to be trying to give them employment there.
Govt’s 100% sovereign guarantee for uncollateralised MSME loans will encourage borrowers to never pay back, discourage banks from lending to them in future.
Govt & individual behaviours have changed to cope with Covid, and economic behaviour will change too. Agriculture & rural industry could be India’s strength.
Where will money for such a package come from? Tax revenue & domestic borrowing could fall this year, and India will need to be risk-free to borrow from abroad.
Printing money, a last resort in financing the deficit, can help move resources from those with some existing savings to those with no existing savings.
As the lockdown is eased, the elderly will need to be protected. But India’s young working population, the largest in the world, will be a great asset.
As India prepares exit strategy from lockdown, it must heed Nobel laureate Paul Romer’s words — spending a small percentage of GDP on testing can get big gains.
Social distancing is our best bet against coronavirus, but will sharpen the impact on the world economy. India is better placed than many developing countries.