Reviving pandemic hit economy

The impact of COVID-19 pandemic, now wreaking havoc with the economies of the worst affected countries for consecutive second year as in our case cannot be analysed in isolation. Globally, this phenomenon is bound to affect all economies. The impact is in terms of short term and long term basis and apart from projections which may be underway to assess exactly the quantum of impact, nevertheless reviving and repairing it too must be on short term and long term basis. Last year, when the pandemic struck all of a sudden like lightening and remained very active or at its peak for over three months during which time more or less, economic activities except in a few sectors remained under tremendous stress. No sooner opening up started , than Government stepped in with reviving package. Bit by bit, as the process of recovery and reviving started taking off , second wave with more ferocity struck again which remained very active for few months. Apart from starting again the opening up process, attention has to be given to those sectors where Government spending apart from generating demand would create and improve infrastructure of a few vital areas. Fiscal measures and support are bound to follow these monetary packages in the near future.
Again, like last year, the Government has started the process of revival and towards that direction, slew of measures having been announced by the Union Finance Minister recently was going to generate hope and reviving process though progressively. Experts would argue that the measures announced would not do much, at least in the very immediate future but would definitely remove hardships and dormancyfaced by the affected sectors. Perhaps, what measures suited last year in repairing the economy and to receive the stimulus to get fixed on rails again may necessarily all not suit this year too. That is because the second wave of COVID almost took us by surprise as much as it struck a blow to the economic recovery which had started picking up. Again, if we analyse in totality, the measures announced, Banks have to increase their credit off take portfolio even at concessional rate of interest with more relaxed repayment schedule.Undoubtedly, for that,the Government was to provide credit guarantee to the lending banks. That is why, a credit guarantee scheme of Rs.1.1 lakh crore for improving health infrastructure and upping the limit by 50 percent to Rs.4.5 lakh crore for the MSME sector under the Emergency Credit Line Guarantee Scheme (ECLGS) has been announced. It is a big step taken definitely to address the liquidity crunch faced by this important sector of the economy. New projects and expansion of the existing projects in health sector and other affected sectors by COVID , will get guarantee cover.
Since the second wave of the COVID pandemic brought into limelight certain deficiencies in hospitals regarding COVID management especially oxygen etc , concessional loans are proposed to be sanctioned in favour of hospitals for setting up of oxygen plants. A package of Rs.6,28,693crore announced would prove as a support base to COVID hit sectors of the economy . The need to rid the industrial sector of the paucity of availability of funds and to enable it to provide employment opportunities has been felt and steps are taken in this regard. It is to be noted that as many as 25 lac entrepreneurs doing small and medium business would be entitled to get a loan facility of up to Rs. 1.25 lac Repayable in a period of three years. These Bank advances would carry a concessional rate of interest by less than 2 percent otherwise payable. Poor sections of the society would be provided free food/ration till ending November this year on which Rs.94000 crore would be spent.
Tourism and hospitality also worst hit sectors, are to get loans at cheaper rate of 8.25 percent . In short, while attempts are made to help the critical and worst hit sectors stand up again from the jolts received from the pandemic, much was going to be done by Banks. A scheme of Rs.33000 crore to boost exports and provide Export Insurance Cover at Rs.88000 crore was aimed at encouraging exporters to sell more abroad. However, measures announced would go in towards helping the impacted economy recover which largely depended upon how increasing spending took place so that the shocks of two years from the pandemic were not only absorbed but effects thereof too resolved to a larger extent.