‘Urban MGNREGA-TYPE of plan is in the works’
The finance minister and chief economic advisor (CEA) have hinted at further measures. The CEA said a fiscal package was on the cards. What are the plans regarding a fiscal intervention and a demand push?
We are already pushing infrastructure. The finance minister has met infra ministries and all central public sector undertakings regarding their capital expenditure commitments. I again reiterate we are ready to push in some more money, if needed, in the infrastructure sector if that has a multiplier effect.
A rural push is also taking place. We are spending more money on the MGNREGS, we have these job schemes, and we have PM Kisan. The MGNREGS numbers have gone up, and we have pushed in some money through direct benefit transfer in rural areas and free ration has been provided to beneficiaries for another five months. No doubt these steps will give a push to the rural economy.
Is there something being planned on urban jobs?
An urban MGNREGA-TYPE of plan is being discussed. But it is premature for me to say something on that. Something is in the works, and it is being done by the relevant ministries. This crisis has taught the issue of migrant workers in urban areas. So there will be certain policies to address that issue.
Does the Centre now have a better understanding of what the economic damage will be? What are your estimates for the year, as well as the April-june quarter?
We have our estimates, but we have also seen the estimates given by international organisations and rating agencies. I have the figures for each one of them. They range from about 3.1 per cent to 5.4-5.5 per cent contraction. And of late, some people have said the contraction will be much higher than this. Let me say that they are also changing their figures. So rather than I laying down a figure, we are watching how we can take the economy on the right path. What we achieve in terms of GDP depends on a lot of things — whether the pandemic spreads more, or if a vaccine is successful in trials and is made available. Even if there is news on a successful vaccine, you will see so much more activity in the country.
The RBI has said that banks’ NPAS may surge to 14.7 per cent in a worst-case scenario. When can we hear something concrete on one-time asset restructuring? Isn’t another round of recapitalisation necessary now?
“We are ready to push in some more money, if needed, in the infra sector if that has a multiplier effect”
The issue of restructuring is more on the RBI’S table. I think they are considering something on that front. The loan interest moratorium is till August. So closer to that I’m sure there should be something. On recapitalisation, the RBI has talked to us about that as well. The financial services secretary is having a look, and will come to us as to what the plans are.