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12 suggestions to solve India's COVID-19 economic woes

By Rahul Mishra
May 06, 2020 16:28 IST
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'A total overall of the existing way of working by abolishing taxes and allowing citizens to help themselves without any government bottlenecks and impediments,' observes Rahul Mishra.

Photograph: Francis Mascarenhas/Reuters
 

1. No stimulus, but abolishment of all taxes both direct like income tax and indirect like GST and all other internal levies and cesses except customs duties.

In this way, money will be in the hands of the public and the velocity of circulation of money will be much faster leading to greater consumption than if the government spent the money.

It is similar to building many check dams than one large dam with lesser capex and maintenance costs also.

The government can meet its expenses by reducing its bloated expenses and also drawing on the revenues of its public sector undertakings. It can charge a fee for services like visa fees but very little fees for approvals.

2. Japan very successfully incorporated MITI as a body to foster cooperation between business and government in the 1950s under the aegis of Emperor Hirohito. Similar such body to be established in India to promote Make in India in the wake of the COVID-19 calamity.

3. As per Dr Subramanian Swamy, the government should print money and use it in infrastructure development only as it will not cause inflation.

4. A one year moratorium on loan repayments on companies which have restarted operations.

5. All employees should be eligible to withdraw 90% of their PF dues to manage the COVID-19 crisis.

6. Approvals given by government agencies to be outsourced to professional agencies such as inspections etc to avoid corruption and delays. Any approval should be time bound or deemed to be approved if not attended to time.

7. MEIS for all exports to be increased to `0% to promote exports as other countries have given much higher export incentives.

8. Packing credit for exports to be 1% by all public sector banks for any coprorates.

9. Abolish all taxes in the stock markets like CTT, STT, capital gains.

10. State electricity boards to reduce their power rates by 20%.

11. Government to follow the import parity pricing policy for petroleum products formulated in the 1990s, but not being followed.

12. Interest costs to be on par with foreign countries and to be say 5%.

In conclusion, a total overall of the existing way of working by abolishing taxes and allowing citizens to help themselves without any government bottlenecks and impediments.

Let the existing practice of the world makes for India be reframed to India makes for the world.

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