REQUIRED REFORMS

In the announcements catered at discussing the first set of components of the Rs 20 Lakh crore economic stimulus package announced recently, the Finance Minister addressed the needs of MSMES and salaried employees and few other sectors. By reducing statutory employees provident fund contribution of both employers and employees for the next three months, the Government has, in turn, provided more cash in hand to all private-sector employees, boosting the demand side of the economy. Furthermore, the reclassification of MSMES and financial package for both stressed and performing MSMES and collateral-free loans for four years with 12 months moratorium will surely inject new lease of life in them, which contributes 6 per cent of the manufacturing GDP and 24 per cent of the service sector GDP and employs more than 12 crore people in India. One of the most critical announcements made during this period was for the construction sector as the six months extension provided as part of the plan to all contracts to complete will surely ease a huge burden from the various construction companies heads. At the same time, a Rs 30,000 crore infusion into NBFCS should revive credit to those who are generally not catered to by commercial banks, but the Government will have to closely monitor the situation to ensure that credit off-take starts taking place without any delay. Otherwise, this huge and potentially game-changing step will not result in the results desired by the Government. Lastly, it is a fair bet to imagine that the next set of announcements will focus on agriculture in a big way as agriculture is at the very heart of the self-sufficiency drive the PM is aiming for as part of these wide-spanning reforms. The sector is in dire need for redressal and aid at this point and any efforts to inject life into it will be awarded big time as they help the country get back on its feet.

..... BAL GOVIND, NOIDA via email