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Government euphoria on the economy: The real condition of the economy cannot be measured by the stock market and rising currency reserves

Professor at the Institute of Social Sciences and author of ‘Indian Economy’s Greatest Crisis: Impact of the Coronavirus and the Road Ahead’ on the condition of the country’s economy. Pro. Arun Kumar from Nalini Ranjan Mohanty Conversed. In this Prof. Kumar said that India should have taken such measures that consumer demand would increase. Last year also, the government did not take measures to put enough money in the hands of the poor, which would have increased the demand. In the US, a package of three trillion dollars has been given, due to which the fiscal deficit has increased by 15 percent and even then there is a demand for a stimulus package of $ 6 trillion. The Government of India cannot go bankrupt as long as it continues to take loans and there are many sources from where the government can take loans. The government should take a loan and give it in the form of cash in the hands of the poor. Conversation excerpts:

Question: We talked about the country’s economy even 6 months ago. The second wave of Corona has once again caused the plight of the economy. What do you think?

Pro. Arun Kumar : Comparing the first quarter of last year and the first quarter of this year, April, 2021 was slightly better than last April. May is more or less the same as last May. Yes, the situation this June is expected to be worse than last June. After that the third wave is intimidating, so different. The economy is expected to grow at barely 5-7 per cent during the first quarter, not 24-25. The hope that the economy will come back on track does not seem to be changing in reality.

Question: Is the government understanding the gravity of the situation or is it still keeping a blind eye to the problem?

Pro. Arun Kumar : The government is hopeful that everything will be fine, but for this, first of all, it will have to wake up from sleep. First, the epidemic has spread to the villages. There is no reliable data coming from there and there is no strategy for vaccination. Second, consumer confidence is shaken. The middle class has to withdraw its deposits from banks, the poor have to borrow for treatment. Children and those who have not been vaccinated are estimated to be affected in the third wave. Business has come to a standstill in such a gloomy atmosphere. If the situation remains the same, let alone the second quarter, the third quarter may also be worse than last year. The growth rate may remain zero or negative in the third quarter.

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