Principal Economic Advisor Sanjeev Sanyal has provided a summary of sorts and offered an assessment of just how the Modi government has gone about tackling the Coronavirus pandemic, of which over 850 cases have now been reported in India.
He has put forth that India has opted for a step-by-step approach, rather than one 'big bang' package.
Sanyal has outlined three major steps taken by three key leaders - Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman and RBI Governor Shaktikanta Das.
The first entailed the Prime Minister issuing a call to secure the population from the disease's rampant transmission, by issuing a 21-day lockdown.
As mentioned in recent interviews, India have opted for a step-by-step approach rather than the one "Big Bang" package approach. First step was to secure the population from a deadly epidemic - hence the 21 day lockdown (nothing else would matter if we lose control) 1/2— Sanjeev Sanyal (@sanjeevsanyal) March 27, 2020
In the second step, he also pointed out that a number of key dates, such as the Fiscal year end, were looming and had to be shifted.
Second, it was recongnized that several key financial deadlines loomed as we approached 31st March. Hence, these were rescheduled (mostly to end-June) to ease the pressure. 2/n— Sanjeev Sanyal (@sanjeevsanyal) March 27, 2020
He then highlighted the Coronavirus relief package announced by Finance Minister Sitharaman, via which Rs 1.75 lakh crore were mobilised in order to ensure food availability and DBT cash transfers.
The next priority was to make sure that basics are secured for the poorest - physical food supplies, cooking gas, and some cash. The is what FM @nsitharaman announced yesterday 3/n— Sanjeev Sanyal (@sanjeevsanyal) March 27, 2020
Then, he moved on to Friday's step, when the RBI slashed the key Repo rate by a huge 75 basis points (one basis point is 1/100th of a percentage point) and took other measures to revive growth. Das also announced steps to ensure liquidity in the system, and in perhaps his biggest move, announced the option of a 3-month moratorium on all term loans outstanding on March 1, 2020.
As a next step, RBI Gov @DasShaktikanta today announced a series of measures to pump in liquidity liquidity into the financial system, sharply cut policy rates and, importantly, provided debt moratorium. 4/n— Sanjeev Sanyal (@sanjeevsanyal) March 27, 2020
Details below: https://t.co/fz0dOlLnbi
He summed up as follows:
As should be clear from the above, the approach does not presume a particular path but is based on constant monitoring of an evolving situation, and responding firmly & systematically. As RBI Gov & FM made clear, we will do whatever it takes 5/n— Sanjeev Sanyal (@sanjeevsanyal) March 27, 2020