The government may bring in a fiscal package even at the cost of a high fiscal deficit, to improve the demand by boosting the sentiment, apart from the monetary policy driven announcement it has made, said Venu Srinivasan, Chairman, TVS Motor Company. He said it was time to quarantine the vulnerable and allow the rest of the population to get back to work.
Speaking at a round table discussion, organised by a community initiative Chennai International Centre (CIC) on Reviving Tamil Nadu’s Economy – Strengthening Investments, Reforms & Stimulus, he said, that economic downturn was as much a psychological matter as it was an economic matter. “People who have money say they will wait for the world to get back. Today, there will be a lot of hesitation in people to come back. China has opened up and according to reports. while Chinese production has picked up, customers are yet to return fully,” he said.
“While the Central government has announced some major steps, that is not enough given fiscally. All that is announced is substantially monetary policy driven,” he said.
The government has given loans and ensured that companies, SMEs in particular, dont sink due to the crisis. However, they have to repay those loans and that can be done only if business grows. In countries where the government pays salaries, a substantial package has been given to those in mid-size and small companies. While India cannot afford this, instead of Rs 1500 given to the poorest, it should have given Rs 5,000 a month for three months and made sure that they don’t lose confidence.
“I would expect from the government, a fiscal package, even at the cost of having a high fiscal deficit. Today we have to bring back buying, otherwise industry will not pick up, and therefore we need to give more than what we have given in the last three days. That is very crucial for the demand to grow,” he added.
India has one of the lowest fatality levels. While it was a bold decision to impose a lockdown a country of this size for such a long period, especially with limited knowledge on the disease, now more information is available about the disease. People above 60 may be asked to go under self quarantine, particulary if they have co-morbidities.
“We say there will be infections at work, it is frightening, but it is true. But it is not so frightening because I personally don’t know one person who has died. In our company, only two people were infected and there is no mortality. This we checked with Tatas, with Cummins, the companies with whom I work. None of them had a problem of that magnitude. Now it is time to quarantine those who are vulnerable and let the rest get back to work,” he added.