There is a feeling, especially among well-wishers of this government, that the Modi government is too fiscally conservative at a time of Covid crisis. Your comments?
I would like to say, no, not at all, in a humble and unemotional way, but I will say, Absolutely not! We have been doing that (opening the fiscal tap), and we will keep doing that.
There is a feeling that most of the package is about easing lending norms, not putting money in people’s pockets. How will demand improve? When can we expect a more direct demand stimulus package?
Is it so watertight a compartment between ‘supply side’ and ‘demand side’? It is very well to say that this is supply side and that is demand side, but the way in which we tailored the schemes was aimed at helping industry, both small and big, to start up once the lockdown is lifted. Whether it is to pay wages or electricity bills or to buy raw materials, or for a trader to replenish his stock, once money is spent on these things does it not mean money is going for demand creation?
While I appreciate the fact that more can be done, I do not think that the government has confined itself to help only one side of the story. We expect the flow from one to the other. I can clearly see that happening. For example, through Nabard and regional rural banks, more rural credit is being pushed. A sum of Rs 90,000 crore has been pumped into the system and is making a difference to the rural economy. Hence a clear-cut division of supply and demand side (stimulus) is not necessarily valid.
You can read the full interview here.
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