Government can take more measures to boost economy: KV Subramanian
However, at the same time, Subramaniam said that the demand for a new stimulus package will be considered in the context of various measures taken by Finance Minister Nirmala Sitharaman in the budget 2021-22.
NEW DELHI: Chief Economic Advisor (CEA) VK Subramaniam has said that the government can take more measures to stimulate the economy affected by the second wave of coronavirus.
However, at the same time, Subramaniam said that the demand for a new stimulus package will be considered in the context of various measures taken by Finance Minister Nirmala Sitharaman in the budget 2021-22. Some industry bodies have suggested that the government should provide a stimulus package of Rs 3 lakh crore to revive the economy hit by the second wave of the pandemic in April-May. Subramaniam's response has come on these suggestions.
According to an assessment by the Reserve Bank, the country has lost production worth about two lakh crore rupees due to the second wave of the epidemic. Subramaniam told PTI in an interview, "Last year also we were ready for more measures. But I think when we are talking about the stimulus package, there is a big difference between last year and this year.
He clarified things saying that the last budget was presented before the pandemic. But this time the budget has been presented amid the pandemic. Many things have already been included in this.
The main focus is on infrastructure spending, he said. This increases the construction activities and ultimately creates employment in the unorganized sector. This was seen in the January-March quarter of the last financial year. The construction sector grew by 15 percent in the fourth quarter and gross fixed capital creation relative to GDP grew by 34 percent in the fourth quarter, the highest in the last six years, he said.
Subramaniam said the ultimate objective is to ensure that the economy's revival picks up pace. The government will do whatever it needs to do to ensure this, he said. On food security for the poor, the CEA said that the government has already extended the main food program for the 80 crore population till November. He said that the cost of expansion of Pradhan Mantri Garib Kalyan Yojana would be Rs 70,000 crore. Subramaniam said that free vaccine is another important economic measure.