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No suspense, please, economy is not a soap opera

No suspense, please, economy is not a soap opera

It seems like watching a new soap opera. Finance Minister Nirmala Sitharaman yesterday announced the first tranche of the Rs 20 lakh crore economic stimulus package. But at her press conference, she refused to give any details on how the additional money would be raised or the fiscal implications of the new announcements or even the broader contours of the stimulus package.

Sitharaman said the details will be given out at the end, once all her announcements—to be made in the next few days—are over. Her message: wait till the end, wait till all the announcements are made in phases to understand the broader implications.

Madam FM, this is not a soap opera or a thriller that people need to be kept in suspense till the climax in the end. We do not know in how many “tranches” would it take to unfold the full package or what it would mean for the broader economy.

Today, there is another press conference, where she will be announcing a few more measures to support the economy. Tomorrow, the Minister may hold another presser and then again may be another day.

The first set of announcements was primarily aimed at supporting the micro small and medium enterprises (MSMEs), besides non-banking finance companies, power sector, and real estate. Speculations and guesswork have already started on what measures would be announced today. The picture would be the same in the coming days, as Sitharaman and her team keep “entertaining” us. For television channels, this comes as manna from heaven, as viewers will be glued on.

Why can’t the country’s Finance Minister announce all the measures in one go? It is no state secret—can never be. The country’s factory output measured by the index of industrial production (IIP) contracted by 16.7 per cent in March, the worst in about four decades. It was worse than anticipated but the news has got lost amid Prime Minister Narendra Modi’s announcement of the stimulus package on the very same day. The headline was Modi’s package and not the fall in IIP.

Most think tanks and rating agencies have slashed India’s growth projections. On Sunday, Japanese brokerage firm Nomura slashed India’s growth projections to -5.2 per cent, as compared to the earlier -0.4 per cent for the current financial year. According to the Centre for Monitoring Indian Economy (CMIE), 27 million youth between 20 and 30 years of age lost their jobs in April due to the stringent nationwide lockdown.

Earlier, speaking to IN, Congress leader and national spokesperson Manish Tewari said that Rs 18 lakh crore had been wiped out of the economy due to the nationwide lockdown. Talking about a possible stimulus package, he said that the government had little room to announce any substantial package even as the economy needed a big boost. “Around 2008, the growth rate was about 9 per cent, it was therefore easy for us to announce a stimulus package but at this point, with falling growth rate, there is no room for any such package,” he said.

Tewari is not alone. Many have raised their concern over a proper stimulus.

In the midst of such confusion, such moves—of laying the contours in tranches—does not augur well after about 50 days of lockdown.

Madam FM, this is not a soap opera. This is the economy. Please give us the details of the government’s plan to revive growth and end the suspense..