Over the past few days, the only issue being discussed in business circles is how much more the Government of India could have done to revive the economy which has stalled after the national lockdown.
Prime Minister Narendra Damodardas Modi announced the size of the stimulus package as Rs 20 lakh crore — close to 10 per cent of the Indian GDP on May 12.
While some praised the government for its measures, others said the package is not adequate to overcome the problems confronting the economy.
One group which is unhappy with the economic package is the Confederation of All India Traders which feels that its members have been left out of the stimulus package as it had in it for them. CAIT had virtually endorsed Modi and his Bharatiya Janata Party before the 2019 general election.
“There is no thought in the financial package as to how it will revive the economy. The solution would have been to waive off six months of interest on loans. This would have excited businessmen and demand would have been generated,” Sushil Kumar Jain, the CAIT’s Delhi-NCR unit convenor, tells Syed Firdaus Ashraf/.
What are your grievances against the government over the Rs 20 lakh crore package?
During this lockdown period, we, small traders or big traders, paid salaries to our employees though we had zero business.
We paid interest on loans to run our businesses.
All the items in our shops have now deteriorated because we did not open our shops due to the lockdown.
And now it will be difficult for us to sell these goods which have been lying in our shops for very long. We do not know if it’s in a saleable condition or not.
In such a situation, we felt the government, instead of giving Rs 20 lakh crore in loans, should have given direct credit to traders so that they could have met their expenses and come out of heavy losses.
What do you mean by direct credit? How different it is from a bank loan?
There is a difference between a bank loan compared to direct credit.
The government thinks by giving loans to traders they can create liquidity in the market and cash run will begin in the system again, but it is not that the money was not available in banks even before the lockdown because banks had funds.
Even before the lockdown there was lack of demand for goods. Therefore, we had less sales.
The government should give direct credit (put money in traders’ accounts) to make up for the deficit in sales.
Today, our big concern and main loss is sale of goods. Till the time our goods do not sell, nothing will move.
And to sell our goods the government will have to change its policies of imports.
If we bring imported goods, then our Indian goods are not going to sell. Modi spoke of swadeshi, but he has not shown the way.
The government will have to change its import policies. If everything is assembled in China and comes to India, then liquidity will not be generated in India. And till the time we do not sell our goods our GDP will be affected.
Today salaries are being cut and industries are shutting down, so who will go out and purchase goods? There is no demand for our goods.
Traders are echoing the the same sentiment as others are about the lack of demand in the market.
The government must generate demand, but instead of that they are saying that people should take loans.
If you (a businessman) are already having a Rs 1 crore overdraft facility, and now there is an advisory given to banks to give that person another overdraft now, but the point is how will this man take an extra loan as he is not seeing any way to expand his business more as there are no sales?
So, what we feel is the government should have given an order to banks that he should be given credit note seeing his history of finance and give him a chance to grow in the market.
Till demand is not created, supply will not improve.
What do you mean by a credit note?
It means 3 to 4 per cent less interest than the market rate which is around 10 per cent. And salaried people must be given that ( credit note) so that they will have more money in their hands to spend and that will give a boost to businesses.
Once they come into the chain, then you will see the demand and supply chain moving and business will move.
We are also demanding from the government that they should at least waive off loans for three months, but that the government is not doing. The government can easily do that, but won’t.
Your association, which is almost 7 crore strong, openly supported the Bharatiya Janata Party before the 2019 election. You know the party and you know its leaders, so why can’t you go to them and list out your grievances?
Every human being has different identities. We support a party and we have inbuilt thoughts (of supporting BJP). And if there is a problem in the family, we will raise our voice. We will surely raise our voice.
But everyone is unhappy and now even you traders are unhappy with the financial package?
There is no thought in the financial package given as to how it will revive the economy.
They are just saying give more loans to people who have already taken loans. If they want money, the bank would have given them in any way so there was no need to give this ( Rs 20 lakh crore) financial package.
The solution would have been to waive off six months of interest on loans. This would have excited businessmen and demand would have been generated.
You have been talking of swadeshi, but what about inferior quality products?
We do not work on technology. We do not work on that aspect of our products. We will have to go swadeshi with good products.
Niti Aayog or any such kind of institution will have to make a grand plan where we can make products in India which are cheap and of the best quality.
What are the losses that traders are facing in this lockdown?
We are facing a loss of Rs 15,000 crore ( Rs 150 billion) per day in India due to the lockdown.
The government has stopped our earnings due to the lockdown and therefore, they must ensure that they do something for our earnings to restart and we, traders, can then correspondingly pay taxes and restart the economy.
How long do you think it will take for the economy to revive?
The economy has gone back to 1990. After 1991, we got money through liberalisation and the face of the economy changed.
In the same way, we have two options today — either we go out in the world and sell our products in a big way or we bring in huge investments in the country and revive the economy. This will create jobs.
And till jobs are not created, the supply chain will not be restored.
Overall, I feel 20 crore jobs are lost in these three months. And this is my rough estimate.
You see barbers, cobblers, rickshaw drivers… all kinds of jobs are gone.