Steps to ease economic distress

The pinch rather the twinge of economic distress due to enforcing measures to fight coronavirus, though has not been felt to have surfaced , yet a few measures to ease the imminent pressure expected to be undergone in the very near future by the people, have been announced. It may be in the form of allowing free of cost money withdrawing facility from the ATMs, waiving the limit of keeping minimum balance requirements in low cost bank deposit accounts, postponing filing of Income Tax returns and slicing penal interest charges for delayed filing of returns from 12 to 9 percent and extending the last date of filing of IT returns for the financial year 2018-19 are apparently going to provide some relief to people. While there was going to be extraordinary strain on the revenues earned by the Government, it had at the same time, to brave the emerging and after-effects of such an unforeseen contingency about which no one had any idea.
Statutory or procedural requirements too stand relaxed as in the case of extending by two months, holding of mandatory board meetings and minimum residency norms for company directors waived which otherwise under Section 149(3) of the New Companies Act is minimum one Director of the company staying in India for at least 182 days in a calendar year. Legislative amendments and necessary circulars and clarifications may be following in due course. Looking to enormity of the stress the dreaded virus was likely to cause to different sections of the society, sectors of the economy, stock markets, economically vulnerable pockets, industries, services sector etc, a comprehensive economic package has also been announced by the Union Finance Ministry today. During the intervening period, the measures under reference announced, while had the potential to instil hopes in the people , at the same time were needing to be speedily implemented and improved upon too. However, the areas which were covered by the announced relaxations by the Government comprised direct taxes, indirect taxes, financial services including banking, corporate governance, fisheries etc.
Linking of Aadhar with PAN and ‘Vivad Say Vishwas’ scheme has been extended to June 30 of the year. Likewise, last date for investments in saving instruments has also been extended . Insolvency and Bankruptcy Code (IBC) too has been touched to raise threshold of default under it to Rs. 1 crore which had the potentiality to prevent triggering of insolvency proceedings against Micro, Small and Medium Enterprises (MSMEs). Not only that, there will be no penalty charged from the concerned MSMEs for delayed filing of GSTR returns due for March , April and May 2020 by the last week of June.
The Government has also announced a Rs 1.7 lakh crore stimulus that included free foodgrain and cooking gas to poor for three months, and cash doles to women and poor senior citizens as it looked to ease the economic impact of the nationwide lockdown.
While over 80 crore poor ration card holders will each get 5 kg of wheat or rice and one kg of preferred pulses free of cost every month for the next three months, 20.4 crore women having Jan Dhan bank accounts would get one-time cash help of Rs 1,500 spread over three months.
Over 8.3 crore poor women, who were handed out free cooking gas connections since 2016, will get free LPG refills for the next three months, while poor senior citizens, widows and disabled will get an ex-gratia cash of Rs 1,000.
Agreed, experts have opined that in comparison to other vastly affected countries on account of the virus , India will not be as much affected but looking to the magnitude of the existing infrastructure , the levels of economic development and the potential to sustain the economic shock those countries were laced with , there was no ground for us to be any complacent. Besides such comparisons drawn were illogical as we have our own peculiar economic problems. There were areas where we were to face the pinch more intensely. Take the case of Railways and Aviation sectors . Railways operations coming to a grinding halt , perhaps for the first time in the history of Indian Railways , was not going to be felt more immediately during the current fiscal only but spread over to a few years more to follow. Aviation industry too on account of suspension of operations on foreign routes followed by suspension of domestic operations would be severely felt. Our exports too would not pick up that fast as dictated by the conditions of our economy post COVID recovery period. Tourism Industry, especially comprising footfall of foreign tourists would see its worst plummeting levels in the very near future.
Providing economic relief in one way or the other, to the affected people from the affected sectors, shall be an issue of utter importance for our economic planners. More shall depend on Government spending and thus helping in giving a push to demand which shall prompt manufacturers to speed up their production levels. Let us not only resort to cut in interest rates and provide credit at low cost as that would not give the desired stimulus to the manufacturing and services sectors.