Two of the senior-most Congress party members, Manmohan Singh and Praveen Chakravarty wrote an article in the Indian newspaper, The Hindu wherein they addressed the crisis the country is going to step in and warned against the deficit monetization.
Manmohan Singh, who was also the finance minister before handling the chair as the Prime Minister of India, wrote about how the global economic crisis will significantly impact India’s economy and this will be one the major blows that the nation has witnessed over decades. Further Chakravarty and Singh went onto to explain how the downfall that India will be going through in coming months will reverse the whole progress that the country made in years and not only this but also will push many people into poverty, a lot of businesses will shut down and the country will lead to severe unemployment.
They further pointed out that the only way that the economy can be brought back on track is by gaining the faith of people and by improving the confidence in people and most of all giving the poor immediate relief from the grave poverty by transferring cash to them by using economic tools of fiscal and monetary policies.
He said that India was as it is suffering from rising unemployment, a slowed growth rate, and a hardwired financial system and the COVID pandemic made it worse. Bothe the authors also drew attention towards the fact that Indian was the only country having a democratic system that did not give direct assistance to the needy during the time of the coronavirus crisis. “There seems to be a misplaced sense of apprehension that providing large cash assistance may deter people from returning to the workforce when needed and starve the industry of labor,” he added. “Such fears are stale and unfounded.” They compared the situation in the United States and India as the former gave higher pay to nearly three-quarters of the unemployed workers while India did not do anything of that sort. The article said, “Consequently, disruption of the normal social order will inevitably impact livelihoods and the larger economy… Economic contraction is not merely a GDP number for economists to analyze and debate. It means a reversal of many years of progress. A significant number among the weaker sections of our society may slip back into poverty, a rare occurrence for a developing nation.”
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