The lockdown 4.0 is underway and the number of Covid-19 cases is still on the rise. But the most important thing right now for us, or at least as per what the media has been feeding us, is that a package of Rs 20 lakh crore was announced by the government. As soon as the package was announced, media houses went into frenzy and played the speech on loop over and over again.
Now, before we get too excited over this; as per a report published on a web portal, of the Rs 20 lakh crore, Rs 1.7 lakh crore had already been disbursed to the government in the first few days of the lockdown. Its salutary effect is therefore long over. Another Rs 5.2 lakh crore was to have been disbursed as loans by the Reserve Bank of India, which brought the borrowing rates for doing this down to levels not known since 2010. But there were no borrowers. So the commercial banks were left with no option but to park all of that money in the RBI’s reverse repo account, which swelled from Rs 3 lakh crore on March 27 to Rs 8.4 lakh crore by the end of April.
Now, it doesn’t really take a genius to read between the lines. To make it even more simpler, just know that there will be no injection of money to revive the economy (the leading economists of the country have been suggesting to do so since the beginning of lockdown) and the amount set aside for migrant labourers who have been hit the hardest in this pandemic is a mere Rs 3,500 crore which accounts for just 0.175% of the total amount.
The demand is at an all time low because of the lockdown yet the government is insisting on manufacturing goods locally, and saying things like ‘Aatma Nirbhar’ and ‘local pe vocal’. Nobody, aside from the so-called upper class people are going to or can afford to buy anything other than food and other essential items until the pandemic is over, so how do you expect a small business owner to make ends meet when nobody is going to buy his product.
The government cannot just force a small business owner (or maybe they can) to take out a loan without collateral and tell the gullible ‘masoom janta’ of our country they are giving out loans free of collateral.
You know what is funny though? This whole thing feels like deja vu. Remember the GST? Who do you think were hit the hardest when the GST was announced? Small Business owners and poor people! Oh, and demonetisation? Who died standing in long queues at the ATM? Poor people! Talk about ‘sabka sath, sabka vikaas!’