The need for ‘maximum government’ -Rohit Azad
The current crisis has provided us with an opportunity to rethink our health, economic and climate policies
In the new set of relief measures announced by the Finance Minister, job creation has moved to the forefront. This shows that the government has finally accepted that the unemployment rates are very high, a fact it has so far been suppressing or dismissing. This is a welcome change given its usual ostrich-like behaviour when it comes to hard economic facts. But recognising a problem is only the first step towards solving it. What hasn’t changed, to our dismay, is the government’s core belief in ‘minimum government’, which ties its hands when it comes to fiscal measures even in such harsh economic conditions, created to a great extent by its own lack of governance during the COVID-induced lockdown. As a result of that lockdown, Indians got both a COVID-19-induced health crisis and, in an attempt to control it, a severe economic crisis.
The ball is in the people’s court
If you look at these relief measures, announced in three tranches — Atmanirbhar 1.0, 2.0 and 3.0 — what the government seems to be saying to the people and businesses is: ‘if you do this, we will award you with this and this’. The ball is being put in the court of those who are suffering instead of the government taking the responsibility of steering the economy out of this turmoil. Take Atmanirbhar 1.0, for example. Out of the 20.9 lakh crore package, 17.9 lakh crore worth of measures were below-the-line ones, such as credit guarantees and liquidity easing. Things are not very different in the other two tranches as well. These measures are made on the assumption that they will induce the business sector to start the virtuous cycle of investment and induce households to increase consumption despite evidence to the contrary.
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The Hindu, 19 November, 2020, https://www.thehindu.com/opinion/op-ed/the-need-for-maximum-government/article33127477.ece?homepage=true