Bikky Khosla | 24 Mar, 2020
Amid the ongoing Coronavirus crisis, a report last week said
that a mix of conventional and unconventional
fiscal and monetary policies would be required to prevent a sharper plunge in
economic activity. It adds that maintenance of a proactive
liquidity regime and facilitating stability in financial market is need of the
time. At the same time, fiscal measures are required at least to provide relief
to people at the lower strata, affected most by shutdown of commercial
activities in the country.
In a similar tone, an industry body has viewed that the
central bank should announce an emergency rate cut of at
least 50 basis points before its scheduled
bi-monthly Monetary Policy Committee meeting in April. No doubt, the Coronavirus
outbreak has diminished the expectations of a global recovery in 2020, and in
this scenario, the RBI should -- in line with global central banks—besides going
for rate cuts -- must take innovative measures to address the ongoing concern.
Meanwhile, in a meeting with Finance
Minister -- who heads the recently constituted Covid-19 Economic Response Task
Force -- the MSME ministry has sought deferment of payments liability like
goods and services tax, loan repayment and electricity bills. It has also
sought a moratorium for repayment of MSME loans. Following this, industry body
Assocham has also come out with proposal for a blanket year-long moratorium by
banks on debt repayment for both corporates and individuals.
Not an iota of doubt, this is a
testing time and the government must do its part to fight it. But at the same
time, we all must do our part as pointed out recently by our Prime Minister,
who appealed the business community and higher income groups
to look after the economic needs of those from lower income groups. The Corona
crisis has already hit had the economic activities in the country, and an orchestrated,
all-out efforts is the call off the time.
I invite your opinions.