According to Singhvi, the delay in giving a financial stimulus is proving to be costly for the state government and the poor. He said, “MSME unemployment has increased and there is no relief for the sector. Many countries are taking different measures to bail out those who have been severely impacted by the coronavirus. For example, the United States which is providing direct funding and Indonesia is giving tax exemptions. While the government has been talking about stimulus we have yet to see one.”
Sinha highlighted that the government has already dispensed two stimulus packages and will continue to disburse further if the need arises.
“Unlike many countries, we have been able to control the pandemic to a great extent. There are many steps that the government has taken to help all the stakeholders during the lockdown. For example, in Lockdown 3.0 we have divided areas into zones and are working on opening industries in phases in areas that come under the green zone.” Said Sinha
Singhvi also feels that the lack of the financial ‘injection’ will affect the demand and become a hindrance to economic revival.
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“Many countries are giving part of their GDP as a stimulus package. If you look at the video conferences that have been happening with the central government, the demand from every state is the same. They want more money. Without it, they are left with options such as opening liquor stores. What is the point of easing loan rates when people are unable to apply for one? The central government may have good intentions but the situation in grassroots remains dire.
Sinha said that the reason for very low credit demand is the lockdown.
“Credit demand has not increased because during the lockdown production was suspended. Once this restart, demand will also revive. The central government, RBI, and the state government are taking every step to combat the effects of the pandemic and for a fiscal stimulus. We have proven our mettle in the last six years and will continue to work with the same momentum”