Crises call for extraordinary government's efforts. As India is under lockdown, the country needs to create a safety net for its 300 million informal workers. In LiveMint, Niranjan Rajadhyaksha Prakhar Misra and Sharmadha Srinivasan outline the measures to support them. They estimate that around ₹3 trillion are required.
"Millions of informal sector workers now face the prospect of economic devastation as a result of the shutdowns across the country. They neither have stable wage contracts nor access to a social security system. There is an urgent need to give them a safety net. Some states, such as Kerala and Uttar Pradesh, have made a beginning, but something needs to be done at a national scale."
"The Indian government is going to be fiscally overstretched in the coming months. It had very little fiscal firepower left even before the world got hit with the Covid-19 shock. Its tax collections will surely decline. It will have to spend, by our estimates, 1.5% of GDP in emergency income support to the poor. And it will need to keep financial resources ready to kick-start aggregate demand once the pandemic storm blows over. The response will thus have to be a coordinated one—across the federal system, between fiscal and monetary authorities, and with other national governments."
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