Today's so-called "package" announced by the FM was Part 1 of "Project Evade". It is clear that the govt has no intention to spend beyond a basic minimum on the fiscal side. For the rest, it plans to rely on the deposit resources of banks. 1/n
Not to say that debt relief measures & liquidity are not important, but they should not become a substitute for fiscal measures. The govt's advisor was saying, quoting Deng Xiaoping(!), that as long as the cat catches the mice, it doesn't matter. It matters. 2/n
More debt creation without regard for debt sustainability or the financial health of banks may turn out to be counterproductive in the medium-term. Also, trying to inject more credit when demand is at its nadir may not turn anything around on the ground 3/n ...
The MSMEs need help not just in liquidity but also in paying salaries and cutting their losses; this is what would also protect jobs. Across the world, govts are also paying firms to protect jobs by giving wage subsidies; broad-based tax relief; and waivers on utility bills. 4/n
The redefinition of MSMEs was long overdue anyway; this was needed to align the govt's and the GST regime's definitions of an MSME and uniformise norms for goods and services. Nothing related to Covid there. See this report from 2018: bit.ly/2WYhSPw 5/n
The extension of 3 months in EPFO means almost nothing; the number of workers benefiting from the measure is very small. @someshjha7 had reported in March that only 16% of the total subscribers of EPFO would benefit from the scheme. See bit.ly/35U9Qv3. 6/n
The reduction of EPFO contribution of employers from 12% to 10% is actually a blow to the worker if the deficit of 2% is not contributed by the govt. There is no clarity as to whether the govt would do it. Most likely not. 7/n
The TDS rate reduction is not a permanent tax gain for the taxpayer. It is a tax that has to be paid later. The time extensions for real estate firms and contractors have zero fiscal implications. n/n
@threadreaderapp pl unroll
