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Coronavirus relief package: Why banking on fiscally conservative policies is imprudent -Pranab Bardhan

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Fiscally austere policies will only serve to further escalate the revenue shortfall and debt problems.

Several economists and businessmen have expressed their disappointment with the contents of the financial package announced by the government to face the unprecedented economic crisis brought about by the Covid-19-induced lockdown, the suddenness and severity of which had itself surprised many epidemiologists.

The callousness toward the migrants and lack of immediate preparation to send them back – or at least feed and house them – before the lockdown have shocked many. The financial package includes many liquidity enhancement policies already announced by the Reserve Bank of India and new loan guarantees that are unlikely to be effective when demand deficiency discourages producers to take loans.

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