TOPIC – A slim stimulus
Finance Minister Nirmala Sitharaman’s fresh set ofmeasures, on Monday, to spur consumer demand and capital expenditureinclude an interestinglydesigned tweak to the LTCallowances of governmentemployees. Her reckoning is that these would lend a₹73,000 crore demand spurt to prop up the ailing economy in the second half of this year. This could rise beyond ₹1lakh crore if private-sector employers offered similar LTC incentives. With industrial output slipping for the sixth month in a row in August, the clamor for new stimulus measures had been growing ahead of a particularly bleak festive season. But this package, which will cost the exchequer about 0.2% of GDP, taking overall fiscal support through the pandemic to 1.7% of GDP, may not be as persuasive as may have been envisaged. Enhancing the Centre’s capital expenditure in specific sectors by ₹25,000 crores from the extant level of ₹4.12lakh crore is laudable. But pandemic restrictions have affected the ability to get new projects going. Till August, just about ₹1.34lakh crore of the budgeted Capex had been spent. The same problem plagues the ₹12,000 crores offered as an interest free 50year loan to States for capital spending over the next six months. While States have been allowed to use these loans to pay off existing contractors’ dues, the amounts on offer are unlikely to have an impact; ₹2,000 crores has been set aside for States that manage to complete three of four reforms mandated in the earlier Atmanirbhar Bharat package, in order to get additional borrowing lee-way. Only some States may qualify forthis.Toomanyconditionsalsopervade the consumption push. Linking LTC perks of government staff who have not availed them yet due to restricted travel during the pandemic to spending on non-travel items is an innovative nudge. But requiring them to spend three times their return ticket fares under LTC on goods and services attracting at least 12% GST from GST registered vendors, maybe too prescriptive and overlooks the reluctance towards discretionary spending due to low visibility on the economy’s prospects. Eligible employees may find the scheme complex and too expensive to avail. One hopes the government has more in its quiverto expedite recovery. Waiting too long for the pandemic to ease before loosening the pursestrings further could extendthe pain. The focus should not just be on conjuring a trickle down stimulus from those with their jobs and savings intact but also on relief measures for those without. Even the IMF has been urging countries to spend now to diminish the damage. Avoiding spending now to maintain fiscal discipline and prevent a rating downgrade seems sensible, but if theunderlyingedificesofthecountry’sgrowthstory crumble in the process, a future downgrade will become inevitable.
MEANINGS AND WORDS
Prop up (verb) – to stop from falling
Synonyms – steadied, trussed, underlay, reinforce, shoring
Antonyms – suppress, abandon, resist, conceal, exterminate
Bleak (adjective) – offering little or no hope
Synonyms – grim, dismal, dreary, desolate, barren
Antonyms – cheerful, sunny, encouraging, pleasant, glorious
Persuasive (adjective) – having the power to induce action
Synonyms – convincing, compelling, cogent, potent, eloquent
Antonyms – dissuasive, feeble, discouraging, faint, groundless
Pervade (verb) – spread through the whole extent of
Synonyms – permeate, imbue, suffuse, penetrate, saturate
Antonyms – shorten, deplete, deplete, collocate, cavernous
Perks (verb) – to look inquisitively
Synonyms – perquisite, gravy, gain, outturn, favor
Antonyms – disadvantage, debt, setback, injuries, lesion
Nudge (verb) – to push against gently
Synonyms – push, prod, poke, shove, jab
Antonyms – pull
Prescriptive (adjective) – pertaining to giving directives or rules
Synonyms – normative, dictatorial, rigid, didactic, arbitrary
Antonyms – descriptive, different, modernistic, original, unorthodox
Discretionary (adjective) – using the ability to act or decide according to your own discretion or judgment
Synonyms – optional, voluntary, elective, discretion, facultative
Antonyms – compulsory, obligatory, required, stringent, forced
Quiver (verb) – to shake slightly
Synonyms – tremble, shiver, shudder, flutter, tremor
Antonyms – stillness, steady, resolve, quiet, stand
Conjure (verb) – bring into existence
Synonyms – evoke, raise, arouse, stir, adjure
Antonyms – repulse, repel, drowse, fading, disenchant
Crumble (verb) – To fall into small pieces
Synonyms – disintegrate, collapse, fall apart, crush, perish
Antonyms – build, improve, better, abide, amp up
