Incentivise private investment to revive economic growth

The COVID19 pandemic has created a number of challenges for the government through its impact on economic growth and domestic demand. Deloitte has issued its first policy paper on potential Government response to the pandemic in the immediate to near term. Key Deloitte suggestions, some of which have already been announced by the Government and RBI over the last couple of weeks, can essentially be grouped into three categories. Managing the endemic and the resultant public health crisis through augmenting financial resources, increasing insurance coverage, and using technology solutions is identified as the first priority. Protecting income and employment, particularly for the more vulnerable sections of society through direct cash transfer programmes backed by adequate monitoring and evaluation mechanisms and using existing digital payment infrastructure has been highlighted as the second key intervention. Finally, supporting businesses, particularly MSMEs, to minimise adverse economic impact and facilitate quick recovery has been identified as the third cornerstone of the potential Government response. Proposed measures towards this objective include immediate credit support, providing focused support for retention of existing workforce etc. to slightly more medium-to-long measures like reconfiguring the existing supply chains. Explaining the launch of the Deloitte Policy Paper Series, Arindam Guha, Partner, Deloitte India said, ”The COVID-19 outbreak has presented new and significant downside risk to the global economic outlook with all major countries like USA, China, UK being severely impacted. We expect that the resultant economic disruption will take time to address and any Government response will also need to be properly calibrated and taken over a period of time. Going forward, we will be monitoring the situation closely and coming out with our suggestions through further policy papers as the situation evolves.”