Opinion | Unlocking the economy: policy roadmap for India after 14 April
Live MintLong before the coronavirus surfaced as a pandemic, the Indian economy was in the midst of a serious downturn. The following sectors, taken together, account for more than two-fifths of India’s gross domestic product : manufacturing, mining, construction, trade, hotels & restaurants, and transport. The same sectors, taken together, also account for more than two-fifths of total employment: manufacturing, mining, construction, trade, hotels & restaurants, and transport. Monetary policy would need to bring down interest rates by 1-1.5 percentage points, plus quantitative easing through RBI lines of credit to banks to assist large firms, particularly in distressed sectors, inter alia by restructuring debt. If the economy is in freefall, the massive slippage in government revenues would balloon the fiscal deficit to similar levels, without any hope of recovery.