Not walls, but many more windmills

Context –  20 Lakh crore stimulus package promises to be booster shot, a catalyst to spur growth, accelerate job-creation and alleviate poverty.

Stimulus should have five elements: 

• Direct cash injection to households (e.g., PM-KISAN Yojana).
• Significant fiscal spending.
• Credit guarantees (e.g., for MSMEs). 
• Liquidity support (e.g., RBI support for NBFCs, mutual funds, etc). 
• A Keynesian large infusion on infrastructure.

FICCI suggestion to revive Economy

• Direct infusion of 2 lakh crore in a ‘Bharat Self-Sufficiency Fund’: potentially generating five times that amount.
• Collateral-free loans for MSMEs with government guarantee. The `3 lakh crore package should help bring back to life a large proportion of MSMEs.
• For the six crore MSMEs employing 11crore people: focus must be on liquidity, quality, capability enhancement and market access. 
• Additional lines of credit for NBFCs and MFIs will aid MSMEs. The change in the definition of MSME will also be a facilitator.

Atmanirbhar Abhiyan should have following components.

• Additional liquidity to vulnerable sections of society.
• Introduce national floor wage for all workers.
• Extend MGNREGA to enrol migrant workers.
• Extend social security fund for unorganised sector as well as gig workers.
• Provide special credit facility for street vendors, etc.

Health

• Strengthen healthcare infrastructure, enable universal access, increase the number and better the quality of healthcare workers, and use the strengths of digitalisation and R&D to make India a healthy nation.

Corporate Sector

• Covid-19 liquidity bridge for providing guarantee to banks.
• Conscientious capitalism will help India rise out of this crisis and make it a truly inclusive nation.

Way Forward

• As the Chinese saying goes, ‘When the winds of change blow, some build walls and others build windmills.’ 
• India needs to build digital, technological, ecological windmills. And windmills generating more empathy. India needs to build digital, technological, ecological windmills. And windmills generating more empathy.