Opinion | Key sectors of India’s economy need support

The wait for a big fiscal stimulus—worth ₹10 trillion or thereabout—to revive India’s economy has begun to seem endless. Might the finer details be holding it back? Given the devastation wrought by the covid pandemic and the lockdown induced by it, the broad requirements are well known. For the poor, more money is needed for food relief. The outlay on our rural employment guarantee scheme needs to be enlarged. The Centre should also provide universal basic relief in the form of direct cash transfers to all citizens, with the better off publicly asked to “give it up”. As this sum will be too small to help taxpayers who lose their income in this crisis, this group should be given back their income tax payments of the last financial year, on the condition that the money is restored to the tax kitty in stages once they start earning again. To reduce job losses, meanwhile, a wage bill subsidy could be offered to employers that do not lay workers off. To be sure, businesses would need far more support than that, given how badly their finances have been squeezed by the lockdown and the likely second-order economic effects of the covid shock. Small enterprises are the most vulnerable, but all businesses now appear acutely short of capital, even large ones. If special credit facilities for businesses are to be extended via the banking system, then the government must backstop these loans. For sectors that have suffered grievously, it could even consider direct bailouts.