Topics Covered: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
Govt. rolls out ₹1.19 lakh crore stimulus:
Context:
The Government has announced a fresh set of relief and stimulus measures for the economy worth ₹1.19 lakh crore. This is being called as “Atmanirbhar Bharat Abhiyan 3.0.”
Key Components of the Package:
Significance of these measures:
Such measures in the last seven months reinforce the ‘fiscal conservatism’ ideology of the government — rather than large cash transfers, the growth philosophy centres around creating an ecosystem that aids domestic demand, incentivises companies to generate jobs and boost production, and simultaneously extends benefits to those in severe distress, be it firms or individuals.
Need for these measures:
Recently, the Reserve Bank of India (RBI) said the country had entered into a technical recession in the first half of 2020-21.
However, the RBI also predicts a strong return to proper growth for the economy. Even ratings agency Moody’s Investor Service had revised its GDP projections for India upwards.
What is a technical recession?
It refers to the sequential decline in GDP for the past two quarters. This presents economic contraction since the GDP measures the value of all goods and services produced in a country during a specific period of time, in other words, the total expenditure in the economy.
Was India’s technical recession unexpected?
- Given the nature of the problem the pandemic as soon as the lockdown was announced in March, most economists expected the Indian economy to go into recession.
- In fact, most estimates expect the economy to contract for at least one more quarter that is October to December.
How long do recessions last?
- Typically, recessions last for a few quarters. If they continue for years, they are referred to as “depressions”. But a depression is quite rare; the last one was during the 1930s in the US.
- In the current scenario, the key determinant for any economy to come out of recession is to control the spread of Covid-19.
InstaLinks:
Prelims Link:
- Measures and schemes announced.
- What is a technical recession?
- Differences between recession and depression.
Mains Link:
What is ‘Atmanirbhar Bharat Abhiyan’? Discuss the significance of self-reliance and self-efficiency in the times of crisis like the COVID pandemic.
Sources: the Hindu.
