From the time the Indian economy went into a tailspin which was much earlier than the Covid rampage, one of the most worrisome aspects has been the fading purchasing power of the consumer class. It’s now unanimously agreed that if revitalization of the demand side is not done immediately, wheels of the economy will remain stuck for an indefinite period. For turning the wheels, yet another set of measures was rolled out on Monday wherein, the arch is on boosting consumers’ demand. Despite the appreciation the measures deserve, it needs to be seen how impactful it’s going to be for the economy as a whole as they have obvious limitations given the fact that targeted beneficiaries are only central government employees. It’s as if the demand factor rests on the spending capabilities of those in government services alone. And still now, for millions of others who have been financially ruined due to the pandemic-stricken economic disaster particularly those in unorganized sectors, there are no direct sops that would effectively drive them to the markets to make purchases. It seems the idea of Universal Basic Income (UBI) has no place in the mindset of the country’s economic policy makers.  

By now it has been officially confirmed that in the April-June period of the 2020-21 financial year the GDP has shrunk by a record minus 23.9 percent and a few days back the RBI’s Monetary Policy Committee (MPC) predicted that taking the whole FY into account, it is going to be minus 9.5 percent. These figures are unsettling to the core and  are smoothly understandable even by a man on the street that to reverse them, it needs a huge effort and even some solutions that will seem apparently unfeasible. The current one is very much a stereotype kind tried many times before and without any major positive outcomes. As a part of the total Rs 73,000 crore package, all central government employees will now get interest-free advance of Rs 10,000 to be spent by March 31, 2021 electronically costing Rs 4000 crore to the central exchequer with the assumption that state governments will follow suit and effectively another Rs 8000 crore will reach in the hands of consumers, also and only the government employees. To soothe the distorted nerves of states due to non-arrival of GST dues, a special interest-free 50-year loan as capital expenditure (Rs 12,000 crore total) including Rs 200 crore each for 8 NE states has been announced.  

These are all welcome. But, aren’t they too little to make any decisive impact on the ailing demand side of the economy? Critical disease needs specialised treatment. Another ‘prescription’ has come and here too that is missing.