The lockdown imposed in March knocked down the economy, causing a GDP loss of over Rs 20 lakh crore and rendering over 100 million workers jobless. The finance minister delivered a huge ‘economic stimulus’ in five tranches. Will it lead to survival and revival, and put the economy back on the rails, or will it act like a mere band-aid?
About 70 per cent of businesses remained shuttered in the first 40 days since March 24. Nearly 50 per cent were closed until the end of the next phase, i.e. May 17. A third of the economy is likely to be disrupted during the ongoing Lockdown 4.0. The economic pain has fallen disproportionately on small businesses and their workers. Many jobs might be permanently lost. Firms as well as employees needed fiscal support to survive the catastrophe. The stimulus was required to generate consumption and investment demand.