Till May 04,2020 we would have lost 35 days of Fy 21. Any extension beyond that date will play havoc on the nation’s finances. This is what our financial set up looks like but with a 25% drop in tax-revenues. It looks scary.
. @narendramodi @PMOIndia @nsitharaman @FinMinIndia
. @narendramodi @PMOIndia @nsitharaman @FinMinIndia
A severely undesirable and predictable outcome is a steep drop in tax collections and an increase in welfare expenditure. Quite possible but equally detrimental.
Collectively, both have the power to shake up any economy and it can hit in several ways. And we are no different.
Collectively, both have the power to shake up any economy and it can hit in several ways. And we are no different.
India’s Balance sheet reflects a revenue stream that is broadly variable (tax and non-tax) and a cost structure that is broadly fixed (interest, salaries, defence, health and subsidies).
In other words, money has to be spent whether the state generates revenue or not.
In other words, money has to be spent whether the state generates revenue or not.
In theory, if we lose more time we move closer to the brink. The country doesn’t have the fire power to last..I hope our leaders take a look at our cost structure before extending the lockdown.
We need to open up for business else we run the risk of going out of business.
We need to open up for business else we run the risk of going out of business.
If revenues were to drop and it will and expenditure were to rise the economy would go into a virtual tail spin.
Transferring money to the public doesn’t create any productive assets. And how much will you transfer and for how long? We are challenged by resources more so now.
Transferring money to the public doesn’t create any productive assets. And how much will you transfer and for how long? We are challenged by resources more so now.
The Govt needs to invest in rebuilding the economy and getting the labour force employed rather than merely transferring cash that will be consumed any which way.Mounting deficits without planning for the future will force us to borrow more. It will also put our currency at risk.
Once the dollar goes out of hand the game will slip,away more. We are not the India of the 16th century where foreigners will come looking for us. We are the India of the 21st century where we have to go out - looking for them. We can’t relax. Economic activity has to go on.
And like it happened before the economy can’t take too many shocks. We can’t put our sovereign to threat. We have to get the economic activity rolling. We have to get out of Abhimanyu’s Chakravyu. We have to break out of this lockdown.There is no substitute to this. None at all.
We have to ensure that industry revives, the small scale gets encouraged to produce, the middle class gets its due and the poor moves out of poverty - one step at a time.The only way out of this mess is to initiate the process of economic growth. Everything else is transitional.
We have experimented a lot over the past 6 years. The focus should now be on the economy. Time is running out. We can’t allow the ‘lockdown’ to turn into an ‘economic knockdown’. We can’t afford an India with 2% GDP growth. We can’t allow things to get to a point of no-return.
